US Stocks Rise Amid Trade Tensions and Job Market Data

February 4, 2025

US stocks closed higher on Tuesday, led by the technology sector, as investors weighed China's swift retaliation to President Trump's additional tariffs and the potential risks of a trade war. Investors were also monitoring fresh job data, which showed a decline in job openings, indicating a cooling labor market.

The Dow Jones Industrial Average gained approximately 0.3%, while the S&P 500 rose by 0.7%. The Nasdaq Composite jumped nearly 1.4% to recoup Monday's losses.

Trade Tensions

Beijing responded swiftly to Trump's 10% levies on Chinese imports by imposing tariffs of 15% on US coal and liquified natural gas, and 10% on crude oil, farm equipment, and some automobiles. The tit-for-tat measures raise the risk of a trade war that could damage both economies.

However, some analysts believe that China's response shows restraint, opening the door to compromise. President Trump has also scheduled talks with Chinese President Xi Jinping, raising hopes of a diplomatic resolution.

Job Market

The Labor Department reported that job openings declined by more than expected in December, hitting their lowest level since September. Economists suggest that the labor market remains "broadly stable," as the ratio of job openings to unemployed workers has remained relatively constant.

This data provides context for the Federal Reserve's upcoming decisions on interest rates. While the labor market is still healthy, the decline in job openings could potentially alleviate some of the pressure on the Fed to lower rates.

Company Earnings

Alphabet (GOOG, GOOGL)

Shares of Google parent Alphabet dropped over 7% after-hours after the company reported weaker-than-expected cloud revenue and higher-than-expected spending.

Snap (SNAP)

Snap shares surged as much as 15% after-hours on strong earnings and revenue that exceeded expectations. The company guided for higher first-quarter revenue than analysts had anticipated.

Chipotle (CMG)

Chipotle stock declined by 6% after-hours before paring losses. The restaurant chain reported comparable sales growth below Wall Street estimates.

AMD (AMD)

AMD shares rose after the company's guidance eased concerns about a slowdown in AI chip sales. The company expects revenue of approximately $7.1 billion for the current quarter, surpassing analysts' estimates.