Market Update: Earnings Overshadow Tariff Concerns

## An Eventful Day for the Financial Markets

Tuesday was a day marked by significant developments and the release of important economic data. Despite certain notable movements, a generally positive undercurrent of healthy earnings persisted. Investors observed developments, taking cues from a one-month hiatus in the North American trade war, alongside the Federal Reserve’s trajectory supported by employment data.

## Palantir Gains from AI Revolution

### Palantir’s Remarkable Growth

Palantir Technologies (PLTR) enjoyed an impressive surge of 24%, marking itself as the top performer in the S&P 500. This came on the heels of its fourth-quarter results, and the company outperformed top- and bottom-line expectations. CEO Alex Karp expressed his optimism, emphasising the company’s key position in the burgeoning AI revolution. He articulated that this revolution would shape the landscape over the coming years.

### Mixed Reactions from Analysts

Despite the exuberant performance, Wall Street maintained cautious optimism. Of the analysts observing Palantir, 13 advocate holding onto the stock. A few incline towards buying, while others continue to caution with sell ratings. Though Palantir’s outlook is promising, it remains to be seen how the market capitalizes on this AI-driven momentum.

[Read more about Palantir’s success here.](https://www.kiplinger.com/investing/stocks/why-palantir-pltr-best-sp-500-stock-after-earnings)

## The Labour Market Remains Steady

Moving onto employment data, the Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics revealed a drop in job openings by 556,000 to 7.6 million. Despite what might seem like troubling news, Barclays Senior U.S. Economist, Jonathan Millar, suggested that these readings were unlikely to affect the Federal Reserve’s policy decisions significantly. The resilient economy appears to have warranted a cautious yet steady approach from policymakers.

## Trouble Looming for Merck in China

### Gardasil Challenges

Merck & Co. (MRK) faced challenges, highlighted by a 9.1% dip in shares following an 18% decline in Gardasil sales. With shipments to China paused till mid-2025, the pharmaceutical giant has faced speculation over its strategic future and concerns about its top cancer treatment, Keytruda.

### Market Analysts’ Perspectives

Despite the decline, Wall Street remains somewhat bullish on Merck. Out of 26 analysts, 14 recommend a Strong Buy, while five suggest buying the stock. Merck’s prospects remain hopeful, although caution prevails given past performance.

[Discover the challenges faced by Merck through STAT News.](https://www.statnews.com/2025/02/04/merck-gardasil-keytruda-cancer-drug-china/)

## Earnings and Market Performance

### S&P 500 Earnings Overview

Earnings data has been encouraging, with 36% of S&P 500 components reporting surprising numbers. FactSet indicates that 77% exceeded earnings expectations, while 63% reported positive revenue surprises. Should the actual growth rate hit 13.2% as projected, it would mark the highest year-over-year growth rate since Q4 2021, according to FactSet’s John Butters.

### Market Movements

Investors weren’t entirely taken aback by recent movements in the markets. DataTrek co-founders, Nick Colas and Jessica Rabe, noted the normalcy of market fluctuations amidst the context of broader earnings stability. This perspective is bolstered by the Nasdaq and S&P 500’s ascent alongside the steady Dow Jones Industrial Average.

Understanding the market dynamics requires observing these nuances amidst global economic shifts and corporate movements.

[Explore further economic indicators through Kiplinger’s economic calendar.](https://www.kiplinger.com/investing/economy/this-weeks-economic-calendar)

## A Look at Current Trade Relations

Reflecting on the trade tensions that have characterised the current administration, Greg Ip of The Wall Street Journal observed how tariff threats serve as negotiation tools rather than expressions of traditional alliances. This evolving approach has left investors apprehensive, yet prepared.

Research from DataTrek underlines how President Trump’s trade strategies often leave investors unsurprised but watchful. Such insights into global economic strategies and their implications remain vital for market participants.

For an in-depth understanding, refer to Greg Ip’s [analysis on trade wars](https://www.wsj.com/economy/trade/trumps-tariffs-usher-in-new-trade-wars-his-goals-remain-a-mystery-559d3190).