Jamie Spencer
US stocks moved higher on Tuesday as investors assessed China’s instant retaliation to US President Donald Trump’s additional tariffs amid worries about the risk of a trade war.
Traders also took in fresh jobs data, with job openings declining more than expected in December. Investors are continuing to watch any signs of cooling in the labor market as the Federal Reserve debates future interest rate cuts in the face of sticky inflation.
The Dow Jones Industrial Average (^DJI) gained around 0.2%, while the benchmark S&P 500 (^GSPC) rose roughly 0.7%. The tech-heavy Nasdaq Composite (^IXIC) jumped about 1.2% on the heels of a losing day for stocks.
Beijing reacted swiftly on Tuesday to Trump’s additional 10% levies on Chinese imports going into effect at midnight. China slapped tariffs of 15% on US coal and liquefied natural gas, starting Feb. 10, alongside 10% duties on imports of crude oil, farm equipment, and some autos.
The tit-for-tat measures raise the risk of an escalation into a trade war that would damage both of the world’s top two economies. But some on Wall Street see the Chinese response as showing restraint that opens the door to compromise, as seen in the US tariff postponement deals with Mexico and Canada.
Giving more cause for optimism, Trump brought forward talks with China’s President Xi Jinping. He said on Monday they would take place “probably over the next 24 hours,” rather than later in the week.
The US dollar index (DX-Y.NYB) fell, down about 0.9% as worries eased somewhat.
Meanwhile, China opened an antitrust investigation into Alphabet’s (GOOG, GOOGL) Google and added Calvin Klein owner PVH (PVH) and biotech company Illumina (ILMN) to its “unreliable entities list.”
Alphabet shares were up about 2% in early trading, as investors wait for the tech megacap’s fourth-quarter results due after the bell. The focus is on insights into the tech giant’s efforts to turn its massive AI investments into new revenue streams and its response to Chinese startup DeepSeek’s cheaper AI models.
