
Market Tension Rises as Neither Trump nor China Pick Up the Phone – US Market Wrap
A wave of dip buying lifted stocks after a wild day in the financial markets, with big tech leading the charge. Alphabet Inc., the parent company of Google, fell in late trading after reporting disappointing revenue figures.
Following a decline fuelled by concerns about a trade war, equities recovered as investors sorted through a slew of corporate earnings. Bullish revenue forecasts from companies such as Palantir Technologies and Infineon Technologies AG boosted sentiment. The “Magnificent Seven” megacaps rose 1.7%. Meta Platforms rose for the 12th consecutive session, its longest winning streak to date.
The most recent data on US job openings indicated a gradual slowdown in the labor market. According to Krishna Guha of Evercore, the data reduces upside risks in Friday’s employment report, which benefits both the Federal Reserve and the markets.
Meanwhile, the first volleys in the latest US-China trade war demonstrated that Xi Jinping is being more cautious than during Donald Trump’s first term. After granting a last-minute reprieve to Canada and Mexico, the US president’s 10% tariffs on China went into effect Tuesday. Within seconds, Beijing announced additional tariffs on approximately 80 products, which will take effect on February 10.
The S&P 500 increased by 0.7%. The Nasdaq 100 gained 1.3%. The Dow Jones Industrial Average rose 0.3%. Palantir gained 24%. Super Micro Computer surged 8.6% on plans to provide a business update. Feb. 11. Merck’s stock fell 9.1% after it halted Gardasil vaccine shipments to China. Estée Lauder fell 16% following a disappointing revenue forecast. It also announced job reductions.
A UBS Group basket of stocks at risk from proposed tariffs recovered after losing more than 6.5% in two days. The yield on 10-year Treasuries fell five basis points to 4.51 percent. The Dollar declined 0.7%. The Mexican peso fell 0.6%. The Canadian dollar rose 0.8%.