Stock indexes rise with chip stocks leading gains despite US-China trade tensions

From Nasdaq MarketSite: 2025-02-04 14:58:03

Stock indexes are on the rise today, with the S&P 500 up +0.58%, Dow Jones up +0.09%, and Nasdaq 100 up +1.14%. Futures for March are also up, with S&P futures at +0.60% and Nasdaq futures at +1.19%. The rally follows President Trump’s decision to delay tariffs on Canada.

The US and China engaged in a tariff war, with the US imposing a 10% tariff on Chinese goods, prompting a swift retaliation from China with tariffs on US coal, natural gas, oil, and more. China also launched a probe into Google for anti-trust violations. Despite this, negotiations are still possible.

Stocks continued to climb despite weaker US economic reports, including a decline in job openings and factory orders. The market remains optimistic amid corporate earnings reports, with companies like Palantir and Cummins reporting better-than-expected results but others like Estee Lauder and Merck facing declines.

The markets are pricing in a 15% chance of a -25bp rate cut at the next FOMC meeting. Overseas markets are also up, with the Euro Stoxx 50 rising +0.75%, while China’s Shanghai Composite Index and Japan’s Nikkei Stock 225 are also in positive territory.

Interest rates remain stable, with March 10-year T-notes unchanged. T-notes initially fell but recovered on weaker US economic data. European government bond yields are up, influenced by US-China trade tensions. Swaps are predicting a rate cut by the ECB in March.

In the US stock market, companies like Palantir, Chip stocks, Xylem Inc, and Fox Corp are leading gains, while others like Merck, PayPal Holdings, and Ball Corp are facing losses. Earnings reports for several companies are due soon, with analysts expecting growth in Q4 earnings for the S&P 500.



Read more at Nasdaq MarketSite: Stocks Climb as Chip Stocks Rally