Wall Street Rebounds as Trade Tensions Ease, Palantir Soars

NEW YORK — U.S. stock markets rallied Tuesday as investors welcomed a temporary pause in escalating trade tensions and strong earnings from tech giant Palantir. The tech-heavy Nasdaq surged 1.35% to 19,654.02, while the S&P 500 rose 0.72% to 6,037.88. The Dow Jones Industrial Average gained 134.13 points, or 0.3%, closing at 44,556.04.

The market rebound followed announcements from Canada and Mexico that the U.S. had agreed to delay implementing new tariffs for 30 days. Canadian Prime Minister Justin Trudeau confirmed the pause in a social media post Monday evening, while Mexican President Claudia Sheinbaum announced a similar agreement earlier in the day.

“These are political tariffs, not economic tariffs, and so they’re not going to last,” said Jay Hatfield, CEO of Infrastructure Capital Advisors, in an interview with CNBC. “What we do think, which is out of consensus, is that eventually we’re going to end up with 5% to 10% tariffs on most imported goods, and that is tolerable.”

Palantir Technologies led the tech sector’s gains, with shares jumping 24% after the company reported better-than-expected earnings. The data analytics firm posted adjusted earnings of 14 cents per share on revenue of $828 million, surpassing analyst estimates.

Meanwhile, China announced new tariffs on U.S. imports, including 15% duties on coal and liquefied natural gas and 10% levies on crude oil, farm equipment, and select cars, effective Feb. 10. The move comes as trade tensions between the world’s two largest economies continue to simmer.

Bank of America strategist Mark Cabana noted that while tariffs could create short-term volatility, they also present opportunities for investors. “We see tariffs as yet another element of support for our view that 2025 is a year for buying stocks,” he wrote in a client note.

Despite the day’s gains, some analysts warned of continued market volatility. “I don’t think the volatility is behind us,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “We’re entering a new year. We’re in the third year of a bull market. Valuations are expensive.”

As investors navigate the evolving trade landscape, all eyes remain on Washington and Beijing for further developments that could shape market trends in the coming weeks.