Stocks Rise on Hopes of Rate Cuts and Chip Tax Exemptions

U.S. stocks moved higher after President Donald Trump announced that some chip-related tariffs would be relaxed, and fresh economic data strengthened the case for a Federal Reserve interest rate cut next month.

‍

As of 9:40 a.m. in New York, the S&P 500 rose by 0.7%, while the Nasdaq 100 gained 0.9%. The Dow Jones Industrial Average was also in positive territory, advancing 0.6%.

‍

Meanwhile, recurring jobless claims climbed to their highest level since November 2021, adding to a string of data suggesting that the labor market is starting to lose steam. This follows last week’s disappointing employment report and a downturn in the services sector.

‍

“The uptick in jobless claims reinforces concerns about the labor market that began with last week’s soft jobs data,” said Matt Maley, chief market strategist at Miller Tabak + Co. “When you combine this trend with recent dovish commentary from Fed officials, the likelihood of a rate cut in September keeps rising.”

‍

Investor sentiment also got a lift from Trump’s comments that companies bringing chip production back to the U.S. such as Apple Inc. could receive exemptions from a proposed 100% tariff on chip imports.

‍

Apple shares surged 2.8% following the announcement. Several of its suppliers, including Corning Inc., also traded higher on the news.

‍

In other corporate news, Intel Corp. shares fell 1.7% after Trump publicly called for the resignation of the chipmaker’s CEO. The statement raised uncertainty about the company's leadership and future direction.

‍

Pharmaceutical giant Eli Lilly & Co. took a hit as well, tumbling after the company released disappointing trial results for its highly anticipated weight-loss drug. In contrast, its major European competitor, Novo Nordisk A/S, saw its stock price jump, reflecting investor optimism over its own obesity treatment pipeline.

‍

DoorDash Inc. climbed 3.6% after the food delivery platform posted stronger-than-expected earnings for the second quarter, reinforcing its position in a competitive market.

‍

On the downside, Crocs Inc. plummeted 25% after the footwear brand warned that cost-cutting efforts and ongoing consumer headwinds—exacerbated by tariffs—would likely weigh on revenue in the near term.

‍

The S&P 500 has now closed above its 50-day moving average by at least 0.5% for 66 straight sessions—a bullish streak that is becoming increasingly rare. This sustained upward momentum suggests strong underlying support despite recent macroeconomic uncertainty.

‍

Markets rallied on a mix of tariff relief and economic signals that could push the Federal Reserve closer to lowering interest rates next month. While rising jobless claims hint at labor market strain, dovish Fed commentary and supportive technical trends have kept investor sentiment resilient.

‍

Key sectors including technology and consumer services responded strongly to earnings results and policy headlines, with companies like Apple and DoorDash leading the charge. Meanwhile, investors punished stocks with weaker outlooks, such as Intel and Crocs.

‍

As the Fed's September meeting approaches, all eyes will be on the next wave of economic data to determine whether a rate cut becomes reality—or just another market hope.

‍