US Stocks Rise on Mixed Signals Amidst China Trade Concerns

Key Points:

* US stocks gained on Tuesday as investors weighed China's swift retaliation to President Trump's additional tariffs.
* Job openings data showed a decline in December, cooling the labor market slightly.
* Tech stocks led the rally, with Alphabet rising over 2%.

Market Overview:

US stocks opened with mixed signals on Tuesday. The Dow Jones Industrial Average (^DJI) gained around 0.4%, while the benchmark S&P 500 (^GSPC) rose roughly 0.8%. The technology-heavy Nasdaq Composite (^IXIC) jumped about 1.3%, recovering from a losing day.

China's Retaliatory Tariffs:

Beijing reacted swiftly to Trump's imposition of 10% levies on Chinese imports. China imposed tariffs of 15% on US coal and liquefied natural gas, starting Feb. 10, alongside 10% duties on imports of crude oil, farm equipment, and certain automobiles. These measures raise the risk of trade war escalation, potentially damaging both economies. However, some analysts see the Chinese response as showing restraint and opening the door to compromise.

Job Market Cools:

Job openings declined in December, indicating a slight cooling in the labor market. The Bureau of Labor Statistics reported 7.6 million open jobs at the end of December, down from 8.15 million in November. Investors continue to monitor signs of cooling in the labor market as the Federal Reserve considers future interest rate cuts.

Tech Sector Leads Gains:

Tech stocks buoyed the major averages, with the Nasdaq Composite leading the way. Alphabet shares jumped nearly 2% to reach intraday record highs. Other tech giants, including Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT), also gained. Nvidia (NVDA), a leading AI chip designer, climbed over 2% after struggling in the previous session.

Other Notable Developments:

* Palantir Technologies (PLTR) surged in pre-market trading after posting strong quarterly results, exceeding revenue forecasts.
* Google (GOOG) faces an antitrust investigation by China amid trade tensions.
* Spotify (SPOT) stock climbed after reporting its first full-year profit and strong subscriber gains.
* PepsiCo (PEP) shares fell in pre-market trading after disappointing earnings, indicating concerns about its ability to meet sales and earnings targets.