Stock Market Update

The S&P 500 futures are up three points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 40 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are down 80 points and are trading 0.2% below fair value.

Contracts linked to the S&P 500 and Nasdaq 100 are higher while futures tied to the Dow industrials move lower.

The focus remains on tariff headlines after President Trump confirmed an agreement to delay tariffs on Canada for 30 days. Canada will implement a $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel. 

Meanwhile, 10% tariffs on Chinese imports went into effect and China announced retaliatory measures, effective February 10. This will include a 15% tariff on coal and LNG imports from the U.S., a 10% tariff on crude oil and machinery imports, and an antitrust investigation into Google.

President Trump will speak with Chinese President Xi within "the next couple of days," according to Reuters. 

Crude oil dropped on the news about China's retaliation. WTI crude oil futures are 2.2% lower at $71.57/bbl. 

In corporate news:

• PepsiCo (PEP 146.75, -3.51, -2.3%): beats by $0.02, reports revs in-line; raises dividend
• Clorox (CLX 155.30, -4.48, -2.8%): beats by $0.15, beats on revs; raises FY25 EPS above consensus, revs in-line
• Palantir Technologies (PLTR 101.91, +18.05, +21.6%): eats by $0.03, beats on revs; guides Q1 revs above consensus; guides FY25 revs above consensus
• NXP Semi (NXPI 202.29, +1.56, +0.8%): beats by $0.02, reports revs in-line; guides Q1 EPS in-line, revs in-line
• Merck (MRK 91.76, -6.04, -8.1%): beats by $0.11, reports revs in-line; guides FY25 EPS below consensus, revs below consensus
• Estee Lauder (EL 76.99, -5.78, -7.0%): beats by $0.30, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; expands restructuring
• Sirius XM (SIRI 24.76, +0.76, +3.2%): 10% owner Warren Buffett's Berkshire Hathaway (BRK.A / BRK.B) bought another 2,308,119 shares at $22.24 - $24.225 worth nearly $54 mln

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region climbed on Tuesday while markets in China remained closed for the last day of Lunar New Year celebrations. Japan's Nikkei: +0.7%, Hong Kong's Hang Seng: +2.8%, China's Shanghai Composite: HOLIDAY, India's Sensex: +1.8%, South Korea's Kospi: +1.1%, Australia's ASX All Ordinaries: +0.1%.
  • In economic data:
    • Japan's January Monetary Base -2.5% yr/yr (expected -0.5%; last -1.0%)
    • New Zealand's December Building Consents -5.6% m/m (last 4.9%)
  • In news:
    • China announced a 15% tariff on coal and LNG imports from the U.S., a 10% tariff on crude oil and machinery imports, and an antitrust investigation into Google as retaliation for U.S. tariffs on Chinese imports.
    • Japan's Prime Minister Ishiba said that it is unclear if deflation will not make a return.
    • India's Prime Minister Modi will meet with President Trump at the White House next week.
  • Major European indices trade on a mostly flat note with Spain's IBEX (+0.8%) showing relative strength. STOXX Europe 600: +0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: -0.1%, France's CAC 40: +0.2%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: +0.8%.
    • In economic data:
      • France's December government budget balance -EUR156.3 bln (last deficit of EUR172.5 bln)
      • Spain's January Unemployment Change 38,700 (expected 45,400; last -25,300)
    • In news:
      • French Prime Minister Bayrou will face a no-confidence vote after pushing through a 2025 budget, but he is expected to survive the vote.
      • The market is almost certain that the Bank of England will announce a 25-basis point rate cut on Thursday.
      • There is ongoing speculation that President Trump will announce a 10% tariff on European imports.
      • Distiller Diageo withdrew its medium-term guidance due to tariff uncertainty.
      • Chipmaker Infineon reported strong results for Q1 and raised its guidance.