Stock markets saw a modest recovery on Tuesday, but investor sentiment remains cautious due to ongoing trade tensions and mixed corporate earnings. President Trump's decision to impose tariffs on China, while delaying them on Mexico and Canada, triggered market volatility. Beijing retaliated with its own tariffs on US goods.
Stock markets saw a slight rebound on Tuesday, despite lingering concerns about market volatility fueled by President Donald Trump's continued implementation of tariffs against China. While Trump delayed tariffs on imports from Mexico and Canada, Beijing retaliated by imposing levies on US energy, vehicles, and equipment imports following the implementation of Trump's 10 percent tariffs. Art Hogan of B.
Riley Wealth noted that the market was adopting a wait-and-see approach regarding Trump's trade policies, particularly in light of the reprieve granted to Mexico and Canada. He also highlighted the positive impact of earnings reports, describing them as a tailwind for the market. All three major US indices finished higher after a sluggish start, reflecting investor optimism despite the uncertainty surrounding trade tensions. However, the hesitant trading underscored the market's sensitivity to geopolitical events. Investors closely followed mixed earnings reports from major companies. Diageo, the alcoholic drinks giant, lowered a key performance target, predicting that sales of tequila and Canadian whisky in the crucial US market would be negatively affected by the tariffs. PepsiCo experienced a slump after reporting flat quarterly sales, attributing the lackluster performance to subdued demand in North America and disruptions caused by geopolitical tensions in international markets. Conversely, Palantir Technologies surged over 20 percent following a strong earnings report, driven by a 36 percent increase in revenues fueled by growth in artificial intelligence. The company's CEO confidently described Palantir as a 'software juggernaut.'Monday's market turmoil, which saw indexes from Japan to New York plummet, was triggered by news of Trump's decision to impose 25 percent tariffs on Mexico and Canada. The tariffs, initially scheduled to take effect, were ultimately postponed until March.Experts cautioned about the potential for a protracted trade war, which could negatively impact global economic growth, escalate US inflation, strengthen the US dollar, and push US interest rates higher. Stephen Dover, chief market strategist and head of Franklin Templeton Institute, emphasized the uncertainty surrounding the permanence of these tariffs, making it difficult for companies to make informed investment decisions. Trump has threatened further tariffs against the European Union and has not ruled out imposing similar measures on Britain. This volatile start to February follows a tumultuous week marked by China's DeepSeek unveiling a cheaper artificial intelligence model that rivals those of US tech giants. This development has raised questions about the significant investments made in the sector in recent years. Ray Attrill, foreign currency strategist at National Australia Bank, predicted that markets would remain susceptible to significant news-driven fluctuations in the immediate future and beyond
TRADE WAR TARIFFS MARKETS EARNINGS CHINA UNITED STATES INVESTORS
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