Stock Market News Today, 2/18/25 – Indices Close Higher amid Inflation and Housing Concerns

Last Updated: 5:05 PM EST

Stocks finished higher in today’s trading as inflation remains a concern for the U.S. economy, while the housing market faces significant headwinds.

According to Mary Daly, President of the Federal Reserve Bank of San Francisco, monetary policy should remain restrictive until inflation is brought under control. While consumer price growth has slowed, the process is “bumpy” and will take longer than expected.

Meanwhile, the housing market is struggling, with homebuilder sentiment hitting a five-month low in February. The National Association of Home Builders/Wells Fargo Housing Market Index dropped to 42 due to concerns over tariffs on imported goods and higher mortgage rates. Indeed, the average 30-year fixed-rate mortgage rate is hovering just under 7%, making it even harder for buyers to enter the market.

It also doesn’t help that there is a housing shortage, which is making inflation worse thanks to rising rents and a rebound in residential spending during 2024. To address the issue, NAHB Chief Economist Robert Dietz suggests that policymakers need to “bend the housing cost curve” to enable more affordable housing. With the economy still in a “good place” overall, according to Daly, finding a balance between controlling inflation and supporting growth will be crucial in the coming months, as it would become increasingly difficult if the economy were to slow down.

First Published: 3:46 AM EST

U.S. futures were trading higher on Tuesday morning, pointing to a positive start to the week. The optimistic market sentiment comes after a strong week of gains for major indices. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were up 0.44%, 0.17%, and 0.31%, respectively, at 3:36 a.m. EST, February 18.

In the last week, the Dow Jones, the S&P 500, and the Nasdaq Composite (NDAQ) surged 0.55%, 1.47%, and 2.58%, respectively. The upside was driven by easing concerns about a potential escalation of trade tensions.

Looking ahead, investors are awaiting some key economic data releases this week, including the February U.S. Manufacturing and Services Purchasing Managers’ Index (PMI) reports on Friday. Further, the market is focused on the release of the Federal Open Market Committee (FOMC) minutes, due tomorrow, which will provide insights into the Federal Reserve’s monetary policy.

It is worth noting that recent comments from Fed Governor Christopher Waller indicated a pause in interest rate cuts until inflation follows the patterns observed in 2024. This has raised expectations for a more cautious approach from the central bank.

On the corporate front, several companies are set to release their earnings today, including Baidu (BIDU), Medtronic (MDT), Arista Networks (ANET), Occidental Petroleum (OXY), and Devon Energy (DVN).

Meanwhile, the U.S. 10-year treasury yield was up, floating near 4.513% as of writing. Simultaneously, WTI crude oil futures are trending higher, hovering near $71.43 per barrel as of the last check.

Elsewhere, European indices opened higher on Tuesday. Defense shares supported gains due to expectations that the European governments will increase defense spending to support Ukraine.

Asia-Pacific Markets Traded Mixed on Tuesday

Asia-Pacific indices were mixed today as traders assessed the impact of Chinese President Xi Jinping’s recent promise to support the private sector during a private meeting with top business leaders, including Alibaba’s (BABA) Jack Ma and BYD’s (BYDDF) Wang Chuanfu. He noted that the challenges they faced were “temporary” and urged the leaders to have confidence in the country’s future.

Notably, the Hang Seng Index rallied 1.59%. Further, Japan’s Nikkei and Topix indices were up 0.25% and 0.31%, respectively. However, China’s Shanghai Composite and Shenzhen Component indices declined 0.93% and 1.61%, respectively.

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