Wall Street Gains Stability After Tariff Fears Spark Volatility

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Wall Street Gains Stability After Tariff Fears Spark Volatility/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ US stock indexes made only modest moves Tuesday as calm returned to Wall Street. The S&P 500 inched up 0.1%, the Dow Jones fell slightly, and the Nasdaq gained 0.3%. Investors remained cautious about potential trade tensions, while earnings reports from companies like Palantir, PepsiCo, and Merck influenced market sentiment.

Traders work on the floor at the New York Stock Exchange in New York, Monday, Feb. 3, 2025. (AP Photo/Seth Wenig)

Stock Market Trends: Quick Looks

Wall Street Stabilizes: US stock indexes saw small movements after recent volatility driven by trade war concerns.
S&P 500 & Nasdaq Gain: The S&P 500 rose 0.1%, and the Nasdaq climbed 0.3%, while the Dow Jones slipped 42 points (0.1%).
Trump Delays Tariffs: President Donald Trump postponed tariffs on imports from Canada and Mexico for a month, easing investor concerns.
China Retaliates: China imposed tariffs on US imports and launched an antitrust probe into Google in response to Trump’s 10% import tax.
Corporate Earnings Impact Stocks:
- Palantir surged 24.8% on strong profits and government contract growth.
- PepsiCo dropped 2.5% due to weak US demand for snacks and drinks.
- Merck tumbled 11.7% despite solid earnings but a cautious outlook.
Bond Market Update: The 10-year Treasury yield ticked up to 4.57% from 4.56%.
Global Market Performance:
- Europe: London’s FTSE 100 fell 0.3%, but other European markets rose.
- Asia: Hong Kong’s Hang Seng surged 2.8%, while South Korea’s Kospi gained 1.1%.

Wall Street Gains Stability After Tariff Fears Spark Volatility

Stock Market Update: A Deep Look

After a period of sharp swings, Wall Street regained stability Tuesday, with US stock indexes moving modestly. The S&P 500 rose 0.1%, the Nasdaq Composite climbed 0.3%, while the Dow Jones Industrial Average fell by 42 points (0.1%). Investors remained cautious following recent fears of a potential trade war sparked by President Donald Trump’s tariff policies.

Earlier, European and Asian markets saw gains, with Hong Kong’s Hang Seng jumping 2.8% and South Korea’s Kospi rising 1.1%. London’s FTSE 100 declined 0.3%, but other major European indexes posted slight increases.

Trade Tensions Ease But Risks Remain

Trump’s Monday decision to delay tariffs on imports from Canada and Mexico for a month provided some relief to investors. The move reinforced hopes that his tough tariff rhetoric is more of a negotiation tactic than a permanent strategy.

However, uncertainty remains, as Trump proceeds with a 10% tariff on imports from China. In response, China retaliated Tuesday by imposing its own tariffs on select US imports and launching an antitrust investigation into Google.

Despite China’s move, shares of Google’s parent company, Alphabet, still rose 0.9% in early trading.

Analysts remain wary. A Bank of America Global Research report, led by strategist Mark Cabana, advised investors to remain cautious, stating,

“The Trump administration is transactional, and nothing is settled until it is final.”

Earnings Reports Drive Individual Stock Moves

While trade tensions dominate headlines, earnings reports from major US companies played a crucial role in Tuesday’s market movements.

Palantir Technologies soared 24.8% after reporting stronger-than-expected profits and robust growth in government contracts (up 45% year-over-year). CEO Alexander Karp described Palantir as a “software juggernaut” in a letter to shareholders.
PepsiCo shares fell 2.5%, as North American demand for its snacks and beverages remained weak. The company has raised prices multiple times, causing consumers to seek cheaper alternatives, leading to a second consecutive quarter of declining sales.
Merck tumbled 11.7%, despite beating sales and profit forecasts. The pharmaceutical giant issued a tepid outlook, dampening investor confidence.