S&P 500, Nasdaq climb on strong gains from Palantir; PepsiCo and Merck shares slip, while Ford rises

The Nasdaq Composite and S&P 500 advanced on Tuesday, driven by a sharp rally in Palantir shares, as investors assessed the latest global trade developments.

The tech-heavy Nasdaq climbed 1.2%, while the S&P 500 added 0.7%.

The Dow Jones Industrial Average also moved higher, gaining 144 points, or 0.3%.

Palantir surged 22% after posting better-than-expected fourth-quarter earnings, pushing the stock to a fresh record high.

The upbeat momentum also lifted other major tech stocks, with Nvidia gaining 2% during the session.

China to impose tariffs on US imports

Starting February 10, China will impose tariffs on a range of US imports.

These include a 15% tariff on coal and liquefied natural gas, a 10% tariff on crude oil, and a 10% tariff on farm equipment and selected cars.

President Trump agreed to postpone tariffs against Canada for at least 30 days.

Canadian Prime Minister Justin Trudeau announced the news on social media site X on Monday evening.

Trump has also agreed to pause more aggressive levies on Mexico.

The major averages ended Monday with losses, despite a striking turnaround after an initial global sell-off.

The Dow slipped 0.28%, the S&P 500 fell 0.76%, and the Nasdaq Composite dropped 1.2%.

“US stock indices cratered on Monday morning after President Trump signed executive orders over the weekend, imposing 25% tariffs on imports from Mexico and Canada (cut to 10% on oil) and an additional 10% tariff on Chinese imports,” David Morrison, senior market analyst at Trade Nation said. 

The news led to a sharp sell-off in global equities, and a sharp rally in the US dollar, at the expense of weakness in the Mexican peso, Canadian dollar and Chinese yuan. But later that day, equities bounced off their lows on news that Mexican tariffs were postponed for a month.

PepsiCo stock plunges

PepsiCo’s stock experienced a decline of more than 4% following the release of its fourth-quarter financial results, which revealed that the company’s revenue had fallen short of analyst expectations.

This disappointing performance has raised concerns among investors about the company’s ability to maintain its growth trajectory in the face of ongoing economic challenges and increased competition in the food and beverage industry.

LSEG reported that PepsiCo’s revenue for the quarter was $27.78 billion, slightly below analysts’ expectations of $27.89 billion. 

This marks the fifth consecutive quarter of declining demand for the company’s snacks and drinks in North America.

Merck shares down

Merck’s stock experienced a significant drop of 11% during pre-market trading. 

This decline was triggered by the pharmaceutical company’s release of its full-year guidance, which failed to meet the expectations set by industry analysts. 

This indicates that Merck anticipates lower earnings or revenue than analysts had previously projected, causing concern among investors and leading to the sell-off of shares.

The company’s projected earnings per share for 2025 are between $8.88 and $9.03. This range falls short of the FactSet analyst consensus estimate of approximately $9.13 per share.

Analysts’ revenue expectations for Merck were higher than the company’s projection of $64.1 billion to $65.6 billion.

General Motors and Ford Motor shares rise

Share prices for General Motors and Ford Motor each rose over 1% on Tuesday after President Donald Trump announced a 30-day pause on tariffs for Canadian imports, following a similar decision for Mexico.

The automotive industry experienced a significant impact following the news that the Trump administration planned to impose a 25% tariff on imports from both Mexico and Canada. 

This news particularly affected two major automakers who have substantial manufacturing operations in North America, especially Mexico.

The tariffs were expected to disrupt the established supply chains and increase production costs for these companies, leading to a decline in their stock prices on Monday. 

On Monday, General Motors closed down 3.2%. Ford Motor fell 1.9%. 

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