U.S. stocks opened higher as investors digested a new batch of earnings and continued to bet on a rate cut next month when the Federal Reserve meets again on policy.
The CME FedWatch tool, which tracks the odds the market gives for a rate move at each Fed meeting, shows a more than 90% chance for a cut at the September 16-17 meeting. Last week, the odds were only in the 60%-range.
Meanwhile, software analytics firm Palantir reported better-than-expected quarterly results, but restaurant chain Denny’s and Hims & Hers Health posted disappointing results. Before the opening bell, Pfizer and DuPont reported strong results; Caterpillar’s quarter was mixed and Yum Brands’ second-quarter results were disappointing.
At 9:42 a.m. ET, the blue-chip Dow added 0.25%, or 108.59 points, to 44,282.23; the broad S&P 500 rose 0.18%, or 11.17 points, to 6,341.11; and the tech-heavy Nasdaq gained 0.23%, or 47.59 points, to 21,101.17. The benchmark 10-year Treasury yield rose to 4.22%.
The stock market’s moves come after posting its largest daily percentage gain since May 27 on hopes for a Federal Reserve rate cut soon and easing trade relations.
Tariff news
President Donald Trump said in a CNBC interview he would announce tariffs on pharmaceuticals and semiconductors “within the next week or so.”
“We’ll be putting an initially small tariff on pharma, but in one year, one-and-a-half years maximum, it’s going to go to 150% and then it’s going to go to 250%,” he said. “We want pharmaceuticals made in our country.”
He also said he plans to raise the 25% tariff on India because the country continues to buy Russian oil. “I think I’m going to raise that very substantially over the next 24 hours because they are buying Russian oil, they are fueling the war machine,” he said.
Separately, Switzerland’s President Karin Keller-Sutter and Economy Minister Guy Parmelin will come to the United States for trade talks, hoping to lower President Donald Trump’s 39% tariff.
Who will be the new Fed chair?
Trump said in his CNBC interview he has narrowed the field to four people, and none are Treasury Secretary Scott Bessent. Some investors had speculated Bessent could take the helm at the Fed when Fed Chair Jerome Powell’s term ends in May, but Trump said Bessent took himself out of the running.
Former Governor Kevin Warsh and National Economic Council director Kevin Hassett are among the contenders. Both have, like Trump, advocated to cut rates.
He did not say whom he was considering to replace Fed Governor Adriana Kugler, who abruptly announced her resignation last week before her term ends.
Corporate news
Palantir’s fiscal third-quarter results beat analysts’ forecasts, with revenue surpassing $1 billion for the first time. The software analytics provider also lifted its full-year sales outlook. Shares jumped 8.49%.
Pfizer reported stronger-than-expected second-quarter results and lifted its full-year adjusted earnings per share outlook. Shares rose 4.08%.
Caterpillar missed second-quarter profit estimates as tariffs took a big bite out of its margins. It now sees its full-year adjusted operating profit margin at the bottom of its target range. The machinery maker’s stock rose 1.23%.
Hims & Hers Health missed second-quarter estimates and guided for below-forecast third-quarter results. Shares slid 10.5%.
Inspire Medical reported second-quarter results that topped Wall Street forecasts but slashed is full-year outlook. Shares tumbled more than 38%.
DuPont’s second-quarter results beat forecasts. The chemicals giant also raised its full-year guidance. Shares added 3.51%.
Eaton topped second-quarter forecasts but cut its current quarter guidance below Street views. Shares of the power management firm lost 6.88%.
Yum Brands, owner of Taco Bell and KFC, missed second-quarter forecasts. Shares were fractionally lower.
Vertex Pharmaceuticals topped second-quarter estimates but warned it won’t progress its next-generation pain treatment, VX-993 after the painkiller failed to meet its primary endpoint in Phase 2. Shares tumbled more than 15%.
Denny’s earnings fell below Wall Street’s expectations and same-store sales dropped in the second-quarter amid continued worries about U.S. consumer spending. Shares fell 6.32%.
Cryptocurrency
David Bailey, Bitcoin adviser to Trump, wants to raise $200 million for a political action committee to advance Bitcoin’s interests in the United States. He said he wants to use the PAC to send Bitcoin to $10 million.
Bitcoin was last down 0.72% at $114,298.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
This article originally appeared on USA TODAY: US stocks open up, fueled by rate cut bets. Trump hints at new tariffs
