US Stocks Rebound Amidst Trade Developments and Jobs Data

US stocks ended higher on Tuesday, led by tech giants, as investors assessed China's retaliation to President Trump's additional tariffs and the potential implications of a trade war.

The Dow Jones Industrial Average (^DJI) climbed 0.3%, while the benchmark S&P 500 (^GSPC) rose 0.7%. The tech-heavy Nasdaq Composite (^IXIC) jumped nearly 1.4% to regain some of Monday's losses.

Trade War Escalation

China responded swiftly to Trump's 10% tariffs on Chinese imports by imposing duties of 15% on US coal and liquified natural gas, effective February 10th. Beijing also levied 10% tariffs on crude oil, farm equipment, and select autos.

Despite the tit-for-tat measures, some analysts view the Chinese response as showing restraint and opening the door for compromise, akin to the tariff postponement deals reached with Mexico and Canada.

Jobs Data and Market Implications

Job openings declined more than anticipated in December, signaling a potential cooling in the labor market. However, the number of openings, at 7.6 million, remains significantly above pre-pandemic levels.

This data, coupled with yesterday's interest rate cut announcement by the Federal Reserve, suggests a cautious approach to further rate cuts in the face of persistent inflation.

Earnings Updates

Alphabet (GOOG, GOOGL) shares dropped after the closing bell as revenue from its cloud business missed expectations, while spending exceeded forecasts. Other notable companies reporting earnings included Chipotle (CMG), AMD (AMD), and Snap (SNAP).

Sector Performance

Technology stocks led the rally, with Nvidia (NVDA) and Apple (AAPL) among the top performers. Healthcare stocks also gained, supported by strong earnings from Palantir (PLTR).

International Markets

European stock markets were mixed, with the Stoxx 600 (^STOXX) hovering near the flatline. Asian markets closed mostly higher.

Outlook

The US-China trade dispute remains a key focus for investors, with potential implications for global economic growth. Traders will also monitor the release of further economic data, including retail sales and consumer confidence, for clues about the health of the economy.