S&P 500 rises as investors shake off Trump’s trade battles, Nasdaq gains 1% led by Palantir: Live updates
The iShares MSCI China ETF (MCHI) and the iShares China Large-Cap ETF (FXI) advanced more than 2%, each, in midday trading, as traders assess trade tensions between the U.S. and China. The Chinese government hit the U.S. with additional tariffs of 15% on imports of coal and liquefied natural gas, starting Feb. 10, as well as 10% higher levy on crude oil, farm equipment and select cars. The move came soon after the U.S. tariffs on Chinese goods took effect.
Apple may be forced to raise iPhone prices if a trade war with China drags on — but that will be “the path of last resort,” Morgan Stanley said in a note Tuesday. The tech giant hasn’t taken any known actions to mitigate the 10% tariff on goods from China, which went into effect Tuesday, analyst Erik Woodring pointed out. Based on estimates from the firm’s supply chain colleagues, the tariff could equate to 3.5% headwinds on earnings per share.
The tech giant could use its smaller production base in India to skirt levy, he noted. However, India’s plant, which accounts for 13% of iPhone production, doesn’t have the ability to support the 67 million iPhones Apple chips to the U.S. in the event that the tariffs have longevity, he said. It is also highly likely that President Donald Trump gives Apple some form of product exemption, which he did during his first administration, Woodring said.
“If both proved unsuccessful, we estimate Apple could raise Product prices by just ~3% to offset the 10% tariff, which amortized over 24 months amounts to an extra $1 per month,” he said.
Check out the companies making headlines before the bell. Pfizer — The pharmaceutical stock added 1.8% on better-than-expected fourth-quarter results. Pfizer reported adjusted earnings of 63 cents per share on $17.76 billion in revenue. Analysts polled by LSEG estimated earnings of 47 cents per share on revenue of $17.36 billion. PepsiCo — Shares of the food and beverage company fell 2% after Pepsi’s fourth-quarter revenue missed expectations. Revenue came in at $27.78 billion, while analysts had forecast $27.89 billion, per LSEG. Demand for its snacks and drinks fell for the fifth straight quarter in North America. Merck — Shares were down 8% in the premarket after the pharmaceutical giant issued full-year guidance that fell short of analyst expectations. The company sees 2025 earnings per share coming in a range of $8.88 and $9.03. Analysts polled by FactSet expected a forecast around $9.13 per share. Merck’s revenue expectations of $64.1 billion to $65.6 billion was also below what analysts anticipated.
Stephen Suttmeier, technical research strategist at Bank of America, cautioned that February could be a rocky month for stocks if historical patterns hold. “The S&P 500 (SPX) can struggle in February, which is the second weakest month of the year after September. Data back to 1928 show the SPX up 53% of the time in February on an average return of -0.09%. February in Presidential Cycle Year 1 shows weaker returns with the SPX up 46% of the time on an average return of -1.66%,” Suttmeier wrote in a note to clients. However, seasonality does tend to improve as Wall Street gets into spring and summer, Suttmeier said.
Shares of General Motors and Ford Motor rose in the premarket Tuesday, up more than 1% each after President Donald Trump paused tariffs on Canada imports for 30 days following a similar move for Mexico. The two automakers were among the names biggest hit Monday — following news over the weekend that Trump is hitting both Mexico and Canada with 25% tariffs — as they each have significant manufacturing operations in North America, especially in Mexico.
Asia-Pacific markets rose Tuesday after Donald Trump paused tariffs on Mexico for a month, while Canada also said the U.S. president had put on hold proposed tariffs on its exports. Hong Kong’s Hang Seng index was up 2.83% in its last hour of trade, as China slapped tariffs on U.S. imports, in retaliation to the U.S. duties on its exports. Chinese markets remain closed for the Lunar New Year holiday. Japan’s benchmark Nikkei 225 ended 0.72% higher at 38,798.37, while the broader Topix index advanced 0.65% to 2,738.02. South Korea’s Kospi rose 1.13% to end the day at 2,481.69 while the small-cap Kosdaq gained 2.29% to close at 719.92. Australia’s S&P/ASX 200 closed flat at 8,374, erasing earlier gains. India’s benchmark Nifty 50 was up 1.19%, while the BSE Sensex index rose 1.12% as of 1.pm local time.
The iShares MSCI Canada ETF (EWC) jumped more than 2% in extended trading on Monday evening. At one point, the ETF was up nearly 2.9%. It hasn’t gained more than 3% since Nov. 2, 2023. The move on Monday came after President Donald Trump agreed to halt the implementation of 25% tariffs on Canada for at least 30 days. Canadian Prime Minister Justin Trudeau posted about the news on the levy on social media platform X.
— news from CNBC
