US stocks rose on Friday after investors weighed President Trump’s new round of tariffs and saw an inflation report that matched expectations. The Dow Jones rose roughly 0.6%, the S&P 500 gained 0.5%, and the Nasdaq ticked 0.2% higher, following three straight days of losses.
August’s Personal Consumption Expenditures index, the Fed’s preferred inflation measure, showed the “core” PCE rose 2.9% year-over-year and 0.2% month-over-month, matching economist forecasts. Inflation remains above the Fed’s 2% target, as reported by Yahoo Finance.
Stock market impact of drug tariffs
Trump threatens 100% tariff on imported drugs.The president said this will apply to any pharmaceutical company not already building a US plant, announced via social media late Thursday. No further details were provided. Shares of drugmakers in Europe and Asia fell after the news.
Trade tariffs add market uncertainty
Imports of heavy trucks and certain furniture categories will also face higher tariffs starting Oct. 1. This adds uncertainty to markets already dealing with AI boom concerns and a potential US government shutdown. S&P 500 eyeing first weekly loss this month, after a slump halted a record-setting rally, investors are cautious, according to the report by Yahoo Finance.
Tech stocks and consumer sentiment
Trump signed an order allowing TikTok’s US operations to separate from China’s ByteDance, but Beijing approval is still required. The proposed $14 billion price was seen as low by Wall Street, with TikTok potentially worth $40 billion. University of Michigan’s final survey showed the index dropped to 55.1, lower than the expected 55.4, and down from 58.2 in August. Americans are increasingly worried about tariffs and high prices.
Joanne Hsu said, “Interviews this month highlight the fact that consumers feel pressure both from the prospect of higher inflation as well as the risk of weaker labor markets.” 44% mentioned high prices hurting personal finances—the highest in a year. People with larger stock holdings remained steady, while those with smaller or no holdings saw decreased sentiment. Independents’ sentiment fell 9%, Republicans’ down 4%, but Democrats’ sentiment rose, as stated by Yahoo Finance.
Inflation and fed rate hopes
Year-ahead inflation expectations dropped to 4.7% in September from 4.8% in August. Long-term expectations for 5–10 years rose to 3.7%, below the 3.9% forecast. The slight easing of “core” inflation in August supports expectations of a Federal Reserve rate cut at the October meeting. Both parties may accept a funding stoppage. Yahoo Finance reports that political pressure even makes a shutdown seem like an opportunity or necessity.
Trump asked agencies to plan for possible mass firings unrelated to the shutdown to pressure Democrats. Dow rose 0.4%, S&P 500 0.3%, Nasdaq 0.15%, after three days of losses. Investors were watching tariffs and the Fed’s inflation gauge. The 30-year yield stayed around 4.74%, down 1 basis point, and the 10-year yield remained at 4.16%, also 1 basis point lower. Traders are pricing in an 88% chance of a Fed rate cut in October.
Wayfair and RH fell 3% in premarket trading. Trump announced 50% tariffs on kitchen cabinets, bathroom vanities, and 30% on upholstered furniture starting Oct. 1. RH CEO Gary Friedman said tariffs hurt margins and smaller companies might struggle. August PCE index rose 0.3% month-over-month, 2.7% year-over-year. Core PCE, excluding food and energy, rose 0.2% month-over-month, 2.9% annually—matching economist estimates, according to the report by Yahoo Finance.
Retail and pharma stocks update
COST fell less than 1% in premarket trading. CFO Gary Millerchip said necessities remain strong, but discretionary purchases are slower. Revenue: $86.16B vs. $86.03B expected; EPS: $5.87 vs. $5.82 expected. Same-store sales up 6.4%, slightly above estimates.
Analysts expect exemptions for companies with US plants. “All big pharma companies have a US presence and almost all have announced large investments,” said Vontobel analyst Sibylle Bischofberger Frick. Merck, Eli Lilly, Novo Nordisk, Novartis, and Sanofi are building or expanding US facilities. Some, like GSK, edged higher; Novo Nordisk fell 3.1%, as per the report by Yahoo Finance.
FAQs
Q1. Why did US stocks rise today?US stocks rose as investors reacted to inflation data meeting expectations and weighed the impact of President Trump’s new tariffs.
Q2. How did Trump’s new tariffs affect the stock market?Trump’s tariffs on drugs, furniture, and trucks added uncertainty, causing some stocks to fall while overall markets still climbed.
