Market News 05 FEB
Market Reaction to Tariffs and Future Prospects
Today's stock market demonstrated confident growth, supported by positive changes in tariff policy and their potential impact on inflation and corporate profits. Despite high expectations, negotiations between the US president and the Chinese chairman did not take place, but China’s retaliatory measures were rather symbolic, boosting investor confidence.
Market Dynamics and Macroeconomic Indicators
The S&P 500 index strengthened by 0.7%, while the technology-oriented Nasdaq Composite gained 1.4%. The growth was driven by a decline in Treasury bond yields, caused by weaker-than-expected US economic indicators. In particular, the number of JOLTS job openings for December fell by 556,000 to 7.6 million, below the projected 8.0 million. Manufacturing orders also disappointed market participants, dropping by 0.9% m/m, marking the largest decline in the past six months.
Corporate Earnings: Winners and Losers
Corporate earnings results were mixed. Among the growth leaders was Palantir Technologies, whose shares soared 23% after publishing impressive quarterly results. Cummins also showed solid growth of 4%, exceeding sales forecasts. Among the laggards, Estee Lauder lost over 16% of its market capitalization due to weak sales forecasts. Merck also failed to meet expectations, dropping 9% following a lowered annual revenue forecast.
Bond Market and Macroeconomic Influence
In the bond market, the yield on 10-year Treasury bonds fell to 4.517%, driven by weak economic reports. The recovery in demand for Treasury securities allowed them to offset early losses, although overall sentiment remains cautious due to potential inflation risks caused by the imposition of US tariffs on Chinese goods.
Technology Sector Growth
Technology giants saw notable growth. Alphabet, Apple, and Tesla rose by more than 2%, while Nvidia, Amazon, and Meta gained more than 1%. Leading players continue to attract investor attention thanks to strong growth metrics and high expectations for new technological advancements.
Key Events Among Individual Companies
Super Micro Computer (SMCI) gained 8% after announcing a business update report, sparking investor interest.
Xylem Inc (XYL) rose by 5% due to strong quarterly earnings that exceeded analyst forecasts.
Fox Corp (FOXA) strengthened by 5% after reporting revenue that surpassed market expectations.
Regeneron Pharmaceuticals (REGN) increased by 4% after posting adjusted earnings per share of $12.07, significantly exceeding consensus forecasts.
Spotify Technology (SPOT) surged 13% due to an increase in active users to 675 million.
Declining Stock Prices and Company Struggles
Estee Lauder (EL) plummeted 16% due to weak sales forecasts.
PayPal Holdings (PYPL) lost 13% after reporting weak payment volume growth.
Merck & Co (MRK) dropped 8% due to a suspension of vaccine shipments to China and a weak annual forecast.
PepsiCo (PEP) fell by 4% on the back of weak revenue data.
Nvidia (NVDA) is under pressure as the US semiconductor market reacts to looming Chinese tariff measures. Meanwhile, Marathon Petroleum (MPC) rose by 6.8% after strong Q4 results. Palantir Technologies (PLTR) surged 24% amid AI sector advancements. Uber (UBER) is preparing to release quarterly results, with investors focused on its autonomous vehicle plans.
The stock market maintains a positive outlook despite macroeconomic uncertainty and geopolitical risks. Investors continue to monitor tariff policy developments and how major corporations respond to current challenges. In the coming weeks, special attention will be paid to reports from technology giants and the dynamics of key macroeconomic indicators.