U.S. and World Markets Refocus On Earnings After Tariff Threats Ring Hollow

Alexander Garcia
04 Feb, 2025
Miami

Stock market indexes in New York overcame morning jitters and managed to advance as investors overlooked Trump's tariff threats. 

The S&P 500 index advanced 0.5%, and the Nasdaq Composite gained 1%, as focus turned away from the threat of tariffs that appear to be designed for political consumption rather than economic reasons.

Investors are increasingly worried that the Trump administration may not be capable of providing the steady and stable policy backdrop needed to support economic growth and bring down elevated inflation.

The U.S. suspended the threat of 25% tariffs on goods shipped from Mexico and Canada for the next thirty days, with little to show for it in return. 

However, Chinese goods will face an additional 10% tariff, which is most likely to be passed on to consumers and fuel inflation in the weeks ahead. 

China retaliated with its own set of tariffs on U.S. goods effective February 10. 

China slapped tariffs of up to 15% on coal and liquefied natural gas and additional tariffs on crude oil, farm equipment, and selected automobiles and vehicles.

China also opened an investigation into the business practices of Google, and sources in Beijing confirm that the government is likely to expand investigations to other American companies doing business in Greater China. 

Job openings in December declined sharply to a three-month low of 7.6 million, the U.S. Bureau of Labor Statistics reported Tuesday. 

Job openings fell from 8.2 million in November and 7.8 million in October, and the largest decreases were recorded in the South by 286,000 and in the West by 250,000. 

On the earnings front, investors reviewed the latest earnings from Estee Lauder, Palantir, UBS, Dassault Systèmes, PayPal, Pfizer, and PepsiCo.

Estee Lauder plunged 11% after the company swung to a quarterly loss, and PayPal dropped 10% after the company's card business struggled. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.5% to 6,028.71, the Nasdaq Composite edged up 1.1% to 19,604.84, and the Russell 2000 index gained 0.9% to 2,278.90.

The yield on 2-year Treasury notes edged higher to 4.27%, 10-year Treasury notes increased to 4.58%, and 30-year Treasury bonds advanced to 4.82%.

WTI crude oil decreased $2.31 to $70.86 a barrel, and natural gas prices edged lower by $0.18 to $3.17 a thermal unit.

Gold rose by $19.17 to $2,832.85 an ounce, and silver edged up by $0.41 to $31.89.

The dollar index, which weighs the US currency against a basket of foreign currencies, declined 0.13 to 108.29 and traded at a two-year high.

 

European Markets Struggled to Advance

European market indexes whipsawed as investors reviewed the latest U.S. actions on the international trade policy. 

Benchmark indexes in Paris, Frankfurt, Milan, and London lacked direction after the U.S. suspended the threat of 25% tariffs on Mexico and Canada but imposed an additional 10% tariff on Chinese imports. 

Market sentiment has been dampened amid the growing realization that the current U.S. presidential administration is likely to pursue a confrontational trade policy.

The U.S. is targeting the European Union to purchase more goods and reduce its overall trade surplus.

Over the last ten years, the European Union has averaged a goods surplus of 100 billion a year with the U.S.

The latest trade confrontation with the U.S. comes at a critical time for the European Union, and the region's economy has been stagnant for many years, and businesses have been struggling to adjust to high costs of energy.

 

Spain's Jobless Rate Drops to 17-Year Low

The number of people registered as jobless increased by 38.275 to 2.6 million, the lowest level in 17 years, according to the data released by the Ministry of Labor and Social Welfare Tuesday.

Unemployment among young people under 25 years of age rose by 1.4% to 188,364 people, the lowest on record for January.

 

Europe Indexes and Yields

The DAX index decreased by 0.06% to 21,415.21; the CAC-40 index increased 0.15% to 7,866.62; and the FTSE 100 index declined by 0.15% to 8,571.10. 

The yield on 10-year German bonds inched higher to 2.42%, French bonds increased to 3.13%, the UK gilts moved up to 4.60%, and Italian bonds edged higher to 3.53%.

The euro declined to $1.03; the British pound was lower at $1.24; and the U.S. dollar was lower and traded at 90.87 Swiss cents.

Brent crude decreased $0.90 to $75.06 a barrel, and the Dutch TTF natural gas was higher by €0.17 to €49.91 per MWh.

 

Europe Stock Movers

UBS Group AG declined 6% to CHF 29.87 despite the Swiss financial service company posting better-than-expected results in the December quarter. 

BNP Paribas increased 1.7% to €65.40 after the French banking group announced a new stock buyback program and higher-than-expected dividend.

 

Sensex Rebounds 1% In Cautious Trading After U.S. Walks Away from Tariff Threats

Stock market indexes in Mumbai rebounded, and the rupee recovered from five-day losses amid the possible easing of geopolitical tensions. 

The Sensex and Nifty indexes advanced 0.9%, but caution prevailed as investors shifted their attention to the latest batch of earnings. 

The newly appointed U.S. presidential administration walked away from its threat of imposing tariffs on goods shipped from Mexico and Canada and delayed the additional tax on imported goods by a month. 

The tariffs announced by Donald Trump, which are an indirect tax on consumers, appeared to be designed for political gains and lacked short- or long-term economic goals.

The latest flip-flop by the U.S. president only encourages other leading nations to engage in direct trade negotiations that bypass the U.S. and China. 

Closer to home, Britannia Industries, Nestle India, Hindustan Unilever, and ITC dropped between 1% and 2%, but Tata Motors, ONGC, BEL, and L&T gained more than 1%.

 

Stock Indexes and Bond Yields

The Sensex index increased by 0.9% to 77,886.38, and the Nifty index advanced by 0.9% to 23,559.10. On the Mumbai stock exchange, 26 stocks traded at their 52-week highs, and 45 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds inched lower to 6.7%, and the Indian rupee hovered near a record and traded at 87.05 against the U.S. dollar.

The gold price decreased by 0.07% to ₹83,222 per ten grams, and the price fell by 0.02% to ₹94,237 per kilo.

Crude oil declined by 0.51 to ₹6,302 per barrel, and natural gas dropped by 0.07% to ₹291.50 per thermal unit.

 

India Movers

Trent plunged 6% to ₹5,767.40 and extended losses in 2025 to 19% after investors worried about the stretched valuations.

Zomato declined 3.3% to ₹230.51, and the online app operator and the delivery service provider extended this year's losses to 16% amid a worry of slowing growth in consumer spending. 

ITC Ltd. dropped 1% to ₹449.25, and the company was among the most actively traded stocks after the finance minister did not announce a new tax on cigarette sales.