Daily Market Recap – Thursday Feb 13, 2025
Stocks Rebound as Tariff Uncertainty Eases
U.S. equities finished higher on Thursday, with all major indices posting strong gains. The S&P 500 (+1.04%) and Nasdaq (+1.50%) led the advance, fueled by a broad-based rebound in big tech, semiconductors, autos, and consumer stocks. Notably, Tesla (TSLA) and Nvidia (NVDA) stood out, while Meta (META) notched its 19th consecutive daily gain. Outperforming sectors included casinos, telecom, containerboard, copper, and online brokers, while airlines, energy, large-cap banks, and hospitality stocks lagged.
Treasuries were firmer as yields pulled back, contributing to risk-on sentiment. The dollar index fell 0.8%, gold rose 0.6%, and Bitcoin futures dipped 1.1%. Meanwhile, WTI crude ended slightly lower (-0.1%) but well off its session lows.
Trump Announces Reciprocal Tariff Plan, Market Takes It in Stride
Stocks hit their session highs after President Trump signed a memorandum outlining a new reciprocal tariff plan, though key details remain uncertain. The plan won’t be implemented immediately, as the Commerce Secretary has been tasked with assessing tariff-equivalent measures for each country. Studies are expected to be released by April 1, with potential tariffs enacted as soon as April 2. While the plan includes provisions targeting semiconductors, autos, and pharmaceuticals, markets viewed the delayed implementation as leaving room for negotiation, easing fears of an immediate trade war.
Inflation and Economic Data Updates
January’s Producer Price Index (PPI) came in above expectations, with higher food and energy prices driving the gains. However, core PPI met estimates, which helped ease inflation concerns following Wednesday’s hotter Consumer Price Index (CPI) report. Notably, December’s PPI figures were revised higher, signaling that price pressures may still persist.
The labor market remained resilient, with initial jobless claims slightly below expectations at 213K, while continuing claims saw a notable decline — both indicating a still-tight job market. Meanwhile, the 30-year Treasury auction tailed, following Wednesday’s weak 10-year sale, as markets continue to digest shifting rate-cut expectations.
Earnings Movers: Robinhood, AppLovin, and Crocs Surge
Earnings season continued with notable moves:
Robinhood (HOOD) soared 14.1% after posting a big beat on earnings, revenue, and user engagement metrics.
AppLovin (APP) jumped 24%, as Q4 revenue and earnings topped expectations, driven by strong digital ad spending.
Crocs (CROX) rallied 23.9%, with a solid beat-and-raise quarter, strong guidance, and a $1.3B share repurchase authorization.
Tesla (TSLA) gained 5.9%, after reports surfaced that the State Department had allocated a $400M budget for armored Tesla vehicles, though this was later revised.
On the downside:
Trade Desk (TTD) plunged 33%, after missing revenue estimates and guiding below consensus, citing execution missteps.
Fastly (FSLY) dropped 20.9%, weighed down by slowing growth and gross margin headwinds.
West Pharmaceutical (WST) fell 38.2%, after issuing weak FY25 guidance, citing softness in contract manufacturing.
Investment Takeaways
Markets shrugged off tariff concerns for now, as Trump’s plan appears to leave room for negotiation rather than immediate escalation. However, inflation concerns remain elevated, with both CPI and PPI prints reinforcing the Fed’s cautious stance. The probability of a June rate cut has now dropped below 50%, with markets now pricing in just one rate cut for the year.
Meanwhile, earnings season has highlighted diverging fortunes across sectors — AI and digital advertising stocks remain strong, while logistics and traditional industrials are facing headwinds. We will be keeping an eye on Friday’s January retail sales report, which could provide key insights into consumer spending trends amid a shifting economic backdrop.