On February 4, the three major stock indexes closed higher with support from energy stocks. Investors found optimism in a potential trade breakthrough between the U.S. and China after President Trump delayed tariffs for Canada and Mexico.
New 10% U.S. tariffs on Chinese imports came into effect on Tuesday, prompting China to implement levies on U.S. goods. Trump indicated he was not rushed to escalate the situation.
Energy stocks drove gains in the S&P, increasing by 2.18%, while utilities and consumer staples experienced declines.
Corporate earnings exceeding expectations also contributed to investor confidence. Among the S&P 500 companies reporting Q4 earnings, 76.8% surpassed analyst forecasts.
Palantir shares surged 24% after reporting revenue above Wall Street estimates for the first quarter. However, Alphabet climbed 2.6% before posting quarterly results that missed expectations, leading to a more than 7% drop in after-hours trading due to slowdown in cloud computing revenue.
The Dow Jones Industrial Average rose by 134.13 points, the S&P 500 by 43.31 points, and the Nasdaq Composite by 262.06 points.
Biotechnology firm Illumina saw a 5.3% decline, while PVH Corp, facing challenges from China's "unreliable entity list," decreased by nearly 1%.
Three Federal Reserve officials highlighted the inflation risks of trade tariffs on Monday. Additionally, a Labor Department report revealed a December job opening figure of 7.6 million, below the 8 million estimated by Reuters economists.
Earnings-wise, PepsiCo dropped 4.5% due to lower-than-expected annual profit, while Estee Lauder plummeted by 16.1% after a weak quarter and job cut announcement. Merck fell by 9.1% after announcing a halt in Gardasil sales to China.
PayPal declined by 13.2% due to its fourth-quarter operating margin. Trading dynamics showed more advancing stocks than declining ones on both the NYSE and the Nasdaq.
Trading volume on U.S. exchanges was 13.39 billion shares, lower than the 15.53-billion average over the last 20 trading days.