Wall Street closed higher on Tuesday recovering some ground that it lost in the previous two days of trading. Market participants were busy assessing the real impact of U.S. tariffs imposed on three largest trading partners of the nation. All three major stock indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 0.3% or 134.13 points to close at 44,556.04 after a choppy session. At intraday low, the blue-chip index was down as much as 93.4 points. Notably, 19 components of the 30-stock index ended in positive territory while 11 in negative zone.
The tech-heavy Nasdaq Composite finished at 19,654.02, climbing 1.4% or 262.06 points due to strong performance by technology behemoths. The major gainer of the tech-laden index was Palantir Technologies Inc. PLTR.
The stock price of the AI-powered software and data analytics firm soared 24%. Palantir currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 advanced 0.7% to finish at 6,037.88. Six out of 11 broad sectors of the broad-market index ended in positive territory, four in negative zone and one remained unchanged.
The Consumer Discretionary Select Sector SPDR (XLY), the Technology Select Sector SPDR (XLK) and the Energy Select Sector SPDR (XLE) were up 1.2%, 1.4% and 2.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 7.6% to 17.21. A total of 13.39 billion shares were traded on Tuesday, lower than the last 20-session average of 15.53 billion. Advancers outnumbered decliners on the NYSE by a 2.81-to-1 ratio. On Nasdaq, a 2.29-to-1 ratio favored advancing issues.
On Jan 31, the White House finally announced that it would impose 25% tariffs on Canadian and Mexican goods and 10% on Chinese imports from Feb 1. Energy imports from Canada will be subject to a 10% tariff. These three countries account for more than 40% of U.S. foreign trade. Trump also said that the next target of the U.S. tariff will be European Union.
However, on Feb 3, the Trump administration delayed the date of implementation of those tariffs by one month. This happened following successful discussions between U.S. President Donald Trump and Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau to resolve border dispute and illegal immigration checking regarding the United States with Mexico and Canada.
On Feb 4, The China imposed tariffs of up to 15% on U.S. imports of coal and liquefied natural gas and 10% higher duties on crude oil, farm equipment and selected cars, effective Feb. 10.
The Department of Labor in its Job Openings and Labor Turnover Survey (JOLTS) report stated that job openings fell by the most in 14 months in December 2024. However, strong hiring and low layoffs indicate the inherent strength of the labor market.
The report shows 1.1 job openings for every unemployed person in December compared with 1.15 in November. Job openings decreased 556,000 to 7.6 million by the last day of December, marking the largest monthly decline since October 2023.
The metric for November was revised upward to 8.156 million from 8.098 million reported earlier. In December, job openings were down 1.3 million, year over year. The job openings rate dropped to 4.5% in December from 4.9% in November.
JOLTS report showed layoffs fell 29,000 to 1.771 million and hiring increased 89,000 to 5.462 million in December. Layoffs rate remained same at 1.1 in the last four months and hiring rate was unchanged at 3.4% for the third consecutive month.
The number of people voluntarily quitting their jobs rose by only 67,000 to 3.197 million in December, indicating the quits rate at 2.0%. The quits rate is viewed as a measure of labor market confidence, and the steady reading points to low wage inflation.
The Department of Commerce reported that factory orders (both durable and non-durable goods) decreased 0.9% in December, in line with the consensus estimate. The metric for November was revised downward to a decline of 0.8% from a drop of 0.4% reported earlier. Factory orders were unchanged on a year-on-year basis in December.
In December, new orders for manufactured durable goods decreased 2.2% while new orders for manufactured non-durable goods dropped 0.3%. Orders for non-defense capital goods excluding aircraft, known as a measure of business spending plans on equipment, gained 0.4% in December.
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