Stock market today: Wall Street holds firm following Trump's latest tariffs

NEW YORK (AP) — Wall Street held relatively firm on Tuesday following President Donald Trump’s latest tariff escalation and after the Federal Reserve hinted interest rates may not change for a while.

The S&P 500 was virtually unchanged and edged up by less than 0.1% in the market’s first trading since Trump announced 25% tariffs on all foreign steel and aluminum coming into the country. The Dow Jones Industrial Average added 123 points, or 0.3%, and the Nasdaq composite slipped 0.4%.

The moves were modest not only for U.S. stocks but also in the bond market, where Treasury yields rose by only a bit.

The threat of a possible trade war is very real, of course, with high potential stakes. Most of Wall Street agrees that substantial and sustained tariffs would push up prices for U.S. households and ultimately lead to big pain for financial markets around the world. The European Union’s chief, Ursula von der Leyen, said on Tuesday that “unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures.”

But trading remained mostly calm in part because Trump has shown he can be quick to pull back on such threats. That’s what he did earlier with 25% tariffs he had announced for all imports from Canada and Mexico, suggesting tariffs may be merely a negotiating chip rather than a true long-term policy. That in turn has much of Wall Street hoping the worst-case scenario may not happen.

“The metal tariffs may serve as negotiating leverage,” according to Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management.

In the meantime, much of Wall Street’s focus on Tuesday swung to a different part of Washington. Federal Reserve Chair Jerome Powell said again in testimony on Capitol Hill that the Fed is in no hurry to ease interest rates any further.

The Fed had cut its main interest rate sharply through the end of last year, hoping to give a boost to the economy. But worries about inflation potentially staying stubbornly high have forced the Fed and traders alike to cut back expectations for cuts in 2025. Some traders are even betting on the possibility of zero, in part because of worries about the effects of tariffs.

“We’re in a pretty good place,” Powell said about where the economy and interest rates are currently. He said again he’s aware that going too slowly on rate cuts could damage the economy, while moving too quickly could push inflation higher.

Higher rates tend to put downward pressure on prices for stocks and other investments, while pressuring the economy by making borrowing more expensive. That could be risky for a U.S. stock market that critics say already looks too expensive. The S&P 500 is not far from its all-time high set late last month.

One way companies can offset such downward pressure on their stock prices is to deliver stronger profits. And big U.S. companies have been mostly doing just that recently, as they report how much profit they made during the last three months of 2024. That, though, hasn’t always been enough.

Marriott International fell 5.4% even though it reported a better profit for the latest quarter than analysts expected. Investors focused instead on its forecasted range for an important underlying measure of profit this upcoming year, which fell short of what analysts were expecting.

Humana sank 3.5% despite reporting a milder loss than analysts expected. The insurer and health care company offered a forecast for profit in 2025 that fell short of Wall Street’s expectations.

Helping to offset such losses was Coca-Cola, which rallied 4.7% after reporting stronger profit and revenue than analysts expected. Growth in China, Brazil and the United States helped lead the way.

DuPont climbed 6.8% after the chemical company likewise reported better profit than Wall Street expected.

All told, the S&P 500 rose 2.06 points to 6,068.50. The Dow Jones Industrial Average rose 123.24 to 44,593.65, and the Nasdaq composite fell 70.41 to 19,643.86.

In the bond market, the yield on the 10-year Treasury rose to 4.53% from 4.50% late Monday. The two-year Treasury yield, which moves more closely with expectations for upcoming action by the Fed, held steady. It remained at 4.28%, where it was late Monday.

In stock markets abroad, indexes were mixed across Europe and Asia. Hong Kong’s Hang Seng fell 1.1%, and South Korea’s Kospi rose 0.7% for some of the bigger moves, while Japanese markets were closed for a national holiday.

FILE - Trader Jonathan Mueller works on the floor of the New York Stock Exchange, Tuesday, Feb. 4, 2025. (AP Photo/Richard Drew, file)

A currency trader passes by a screen showing the Korea Composite Stock Price Index (KOSPI), top center left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Feb. 11, 2025. (AP Photo/Ahn Young-joon)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, top right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Feb. 11, 2025. (AP Photo/Ahn Young-joon)

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Feb. 11, 2025. (AP Photo/Ahn Young-joon)

DUBAI, United Arab Emirates (AP) — Nationwide protests in Iran sparked by the Islamic Republic's ailing economy are putting new pressure on its theocracy as it has shut down the internet and telephone networks.

Tehran is still reeling from a 12-day war launched by Israel in June that saw the United States bomb nuclear sites in Iran. Economic pressure, which has intensified since September when the United Nations reimposed sanctions on the country over its atomic program, has sent Iran's rial currency into a free fall, now trading at over 1.4 million to $1.

Meanwhile, Iran's self-described “Axis of Resistance” — a coalition of countries and militant groups backed by Tehran — has been decimated since the start of the Israel-Hamas war in 2023.

A threat by U.S. President Donald Trump warning Iran that if Tehran “violently kills peaceful protesters” the U.S. “will come to their rescue," has taken on new meaning after American troops captured Venezuelan President Nicolás Maduro, a longtime ally of Tehran.

“We're watching it very closely,” Trump said Sunday. “If they start killing people like they have in the past, I think they're going to get hit very hard by the United States.”

Here's what to know about the protests and the challenges facing Iran's government.

More than 390 protests have taken place across all of Iran’s 31 provinces, the U.S.-based Human Rights Activists News Agency reported Friday. The death toll had reached at least 42, it added, with more than 2,270 arrests. The group relies on an activist network inside of Iran for its reporting and has been accurate in past unrest.

Understanding the scale of the protests has been difficult. Iranian state media has provided little information about the demonstrations. Online videos offer only brief, shaky glimpses of people in the streets or the sound of gunfire. Journalists in general in Iran also face limits on reporting such as requiring permission to travel around the country, as well as the threat of harassment or arrest by authorities. The internet shutdown has further complicated the situation.

But the protests do not appear to be stopping, even after Supreme Leader Ayatollah Ali Khamenei on Saturday said “rioters must be put in their place.”

The collapse of the rial has led to a widening economic crisis in Iran. Prices are up on meat, rice and other staples of the Iranian dinner table. The nation has been struggling with an annual inflation rate of some 40%.

In December, Iran introduced a new pricing tier for its nationally subsidized gasoline, raising the price of some of the world’s cheapest gas and further pressuring the population. Tehran may seek steeper price increases in the future, as the government now will review prices every three months. Meanwhile, food prizes are expected to spike after Iran’s Central Bank in recent days ended a preferential, subsidized dollar-rial exchange rate for all products except medicine and wheat.

The protests began in late December with merchants in Tehran before spreading. While initially focused on economic issues, the demonstrations soon saw protesters chanting anti-government statements as well. Anger has been simmering over the years, particularly after the 2022 death of 22-year-old Mahsa Amini in police custody that triggered nationwide demonstrations.

Iran's “Axis of Resistance," which grew in prominence in the years after the 2003 U.S.-led invasion and subsequent occupation of Iraq, is reeling.

Israel has crushed Hamas in the devastating war in the Gaza Strip. Hezbollah, the Shiite militant group in Lebanon, has seen its top leadership killed by Israel and has been struggling since. A lightning offensive in December 2024 overthrew Iran’s longtime stalwart ally and client in Syria, President Bashar Assad, after years of war there. Yemen's Iranian-backed Houthi rebels also have been pounded by Israeli and U.S. airstrikes.

China meanwhile has remained a major buyer of Iranian crude oil, but hasn't provided overt military support. Neither has Russia, which has relied on Iranian drones in its war on Ukraine.

Iran has insisted for decades that its nuclear program is peaceful. However, its officials have increasingly threatened to pursue a nuclear weapon. Iran had been enriching uranium to near weapons-grade levels prior to the U.S. attack in June, making it the only country in the world without a nuclear weapons program to do so.

Tehran also increasingly cut back its cooperation with the International Atomic Energy Agency, the U.N.'s nuclear watchdog, as tensions increased over its nuclear program in recent years. The IAEA's director-general has warned Iran could build as many as 10 nuclear bombs, should it decide to weaponize its program.

U.S. intelligence agencies have assessed that Iran has yet to begin a weapons program, but has “undertaken activities that better position it to produce a nuclear device, if it chooses to do so.”

Iran recently said it was no longer enriching uranium at any site in the country, trying to signal to the West that it remains open to potential negotiations over its atomic program to ease sanctions. But there's been no significant talks in the months since the June war.

Iran decades ago was one of the United States’ top allies in the Mideast under Shah Mohammad Reza Pahlavi, who purchased American military weapons and allowed CIA technicians to run secret listening posts monitoring the neighboring Soviet Union. The CIA fomented a 1953 coup that cemented the shah’s rule.

But in January 1979, the shah fled Iran as mass demonstrations swelled against his rule. Then came the Islamic Revolution led by Ayatollah Ruhollah Khomeini, which created Iran’s theocratic government.

Later that year, university students overran the U.S. Embassy in Tehran, seeking the shah’s extradition and sparking the 444-day hostage crisis that saw diplomatic relations between Iran and the U.S. severed.

During the Iran-Iraq war of the 1980s, the U.S. backed Saddam Hussein. During that conflict, the U.S. launched a one-day assault that crippled Iran at sea as part of the so-called “Tanker War,” and later shot down an Iranian commercial airliner that the U.S. military said it mistook for a warplane.

Iran and the U.S. have seesawed between enmity and grudging diplomacy in the years since. Relations peaked with the 2015 nuclear deal, which saw Iran greatly limit its program in exchange for the lifting of sanctions. But Trump unilaterally withdrew America from the accord in 2018, sparking tensions in the Mideast that intensified after Hamas' Oct. 7, 2023, attack on Israel.

FILE -A student looks at Iran's domestically built centrifuges in an exhibition of the country's nuclear achievements, in Tehran, Iran, Wednesday, Feb. 8, 2023. (AP Photo/Vahid Salemi, File)

FILE - An Iranian security official in protective clothing walks through part of the Uranium Conversion Facility just outside the Iranian city of Isfahan, on March 30, 2005. (AP Photo/Vahid Salemi, File)

FILE - A customer shops at a supermarket at a shopping mall in northern Tehran, on Sept. 28, 2025. (AP Photo/Vahid Salemi, File)

FILE - Current and pre-revolution Iranian banknotes are displayed by a street money exchanger at Ferdowsi square, Tehran's go-to venue for foreign currency exchange, in downtown Tehran, Iran, on Aug. 28, 2025. (AP Photo/Vahid Salemi, File)

FILE - People cross the Enqelab-e-Eslami (Islamic Revolution) street in Tehran, Iran, on Sept. 27, 2025. (AP Photo/Vahid Salemi, File)

FILE - Protesters march on a bridge in Tehran, Iran, on Dec. 29, 2025. (Fars News Agency via AP, File)

People wave national flags during a ceremony commemorating the death anniversary of the late commander of the Iran's Revolutionary Guard expeditionary Quds Force, Gen. Qassem Soleimani, who was killed in a U.S. drone attack in 2020 in Iraq, at the Imam Khomeini grand mosque in Tehran, Iran, Thursday, Jan. 1, 2026. (AP Photo/Vahid Salemi)