The stock market moved higher on Tuesday as Wall Street sought stable footing following the latest developments on the global trade front. The tech-heavy Nasdaq composite index jumped 1.35% to 19,654.02, while the S&P 500 rose 0.72% to 6,037.88. The Dow Jones Industrial Average climbed 134.13 points, or 0.3%, to 44,556.04.
Palantir shares soared by about 24% after beating analysts’ expectations, leading a broader rally in Big Tech stocks. The chip giant also advanced, gaining 1.7% during the session. The latest shift in tariffs saw the Chinese government impose new duties on U.S. imports, including coal, liquefied natural gas, crude oil, farm equipment, and selected cars, effective February 10.
This comes after the U.S. agreed to pause more aggressive tariffs on Canada and Mexico. Canadian Prime Minister announced that President Donald Trump agreed to halt tariffs for at least 30 days, and Mexican President Claudia Sheinbaum also confirmed a one-month pause on tariffs on Mexican imports to the U.S.
Despite the initial volatility from these tariff announcements, the major indexes managed to close higher on Tuesday. Stocks had rebounded strongly from Monday’s sell-off, where the Dow, S&P 500, and Nasdaq recorded losses but managed to recover some ground by the end of the trading day.
Jay Hatfield of Infrastructure Capital Advisors commented on the optimistic market sentiment, arguing that political tariffs would not have long-term economic impacts. He predicted that, while tariffs might temporarily affect markets, they are manageable. Hatfield set an S&P 500 year-end target of 7,000, implying nearly 17% upside from Monday’s close.
Palantir shares lead tech rally
Market strategists at Bank of America also saw opportunities in the current environment. Mark Cabana suggested that pullbacks due to the tariffs could be a chance for investors, viewing 2025 as a year to buy stocks despite perceived risks in the S&P 500’s high valuation and concentration.
Verdence Capital Advisors’ CIO Megan Horneman warned that market volatility might persist, particularly in the first half of 2025. Factors such as inflation, Federal Reserve policy, and consumer strength will likely influence market movements. Twenty-two stocks in the S&P 500 reached new 52-week highs during Tuesday’s session, with 19 hitting all-time high levels.
Top performers included long-standing companies that have seen robust performance since their IPOs, stretching back decades. Vaccine and food stocks fell as Robert F. Kennedy Jr., known for his skepticism towards vaccines and criticism of ultraprocessed foods, advanced toward confirmation as the U.S. health secretary.
Shares of vaccine manufacturers dipped significantly, with some biotech and pharmaceutical companies rising in contrast. Packaged food company stocks also traded lower, with several major firms experiencing declines. Evercore analyst Sarah Bianchi noted that Kennedy’s policies could significantly impact both the food and vaccine industries.
Market participants will be closely watching his potential influence as health secretary.