[New York Stock Market] US PPI Relief and Trump Learning Effect... S&P Approaches Previous Highs

Trump Announces Reciprocal Tariffs... Expected to Take Effect on April 1
U.S. Producer Price Index Slows from Previous Month
Market Learns from Trump's Past Moves with Mexico and Canada
Focus on U.S. January Industrial Production and Retail Sales Data

The three major indices of the U.S. New York Stock Exchange closed higher together on the 13th (local time). Although the U.S. Producer Price Index (PPI) for January exceeded market expectations, it slowed compared to the previous month. Additionally, despite the announcement of President Donald Trump's reciprocal tariff plan, the market does not seem to view it as an excessive negative factor, having learned from recent trade negotiations with Mexico and Canada.

On this day at the New York Stock Exchange, the blue-chip-focused Dow Jones Industrial Average closed at 44,711.43, up 0.77% from the previous session. The large-cap-oriented S&P 500 index rose 1.04% to 6,115.07, approaching its previous high. The tech-heavy Nasdaq Composite Index ended the day up 1.50% at 19,945.64.

Big tech companies showed strength. Tesla and Nvidia each rose more than 3%. Apple gained over 2% after CEO Tim Cook announced a new product launch scheduled for February 29. Meta Platforms (Meta) also continued its 19-day streak of gains. Among individual companies, mobile advertising technology firm AppLovin's stock surged 24% following the announcement of a sharp increase in quarterly earnings and the signing of a deal to sell its mobile gaming business.

Investors are viewing President Trump's last-minute delay of tariffs on Canada and Mexico as a sign that tariffs are likely to be used again as a bargaining chip.

Market strategist Michael Block told CNN, "President Trump tends to make exaggerated statements and then adjusts them. We expect the worst, but eventually realize he is employing negotiation tactics."

Keith Lerner, Co-Chief Investment Officer (CIO) at Truist Wealth, also explained, "The market is relatively calm because the 50% tariffs on all products will not suddenly be imposed starting tomorrow." The reciprocal tariffs are expected to take effect on April 1.

However, experts warned, as reported by CNN, that the mere threat of tariffs could dampen corporate investment sentiment and cause the Federal Reserve (Fed) to delay interest rate cuts further.

Despite signs of rising inflation in the U.S., investor sentiment was not significantly dampened. The U.S. Department of Labor announced that the PPI for January rose 0.4% month-over-month. The increase exceeded the 0.3% forecast compiled by Dow Jones experts. However, compared to the 0.5% increase in December, the market seemed somewhat relieved by the slowdown. The December figure was significantly revised upward from an initial 0.2% increase to 0.5%.

Paul Ashworth, Chief North America Economist at Capital Economics, evaluated in an investment memo that day, "The components reflected in the Fed's preferred personal consumption expenditures (PCE) price measure were generally favorable."

The items influencing the PCE price index, the Fed's preferred inflation gauge, showed relatively moderate increases. Accordingly, some economists expect that last month's PCE figures came closer to the Fed's target.

Government bond yields fell. The 10-year U.S. Treasury yield, a global benchmark for bond yields, dropped 9 basis points (1bp = 0.01 percentage points) to 4.53%. The 2-year yield, sensitive to policy rates, fell 5.6 basis points to 4.31%. Bond yields move inversely to prices. As safe-haven demand strengthened, the Japanese yen rose 1.1%.

Meanwhile, investors are also focusing on economic indicators scheduled for release this week. Key data include Eurozone GDP, U.S. retail sales for January, and U.S. industrial production for January, all to be released on the 14th.