Stock Market Today: Earnings Speak Louder Than Tariffs
Recent market reaction to Trump administration policy announcements has been "entirely normal."



Joey Solitro
Big moves for a couple of high-profile names masked a steady undercurrent of basically healthy earnings on Tuesday. Softer-than-expected but still stable employment data continue to support the Federal Reserve's chosen policy path. And a one-month truce in the North American trade war has encouraged market participants who expect the Trump administration to use tariff threats as negotiating tools.
"The postwar bipartisan consensus that the U.S. prospers by fostering cooperation and integration with allies and neighbors is gone," writes Greg Ip in The Wall Street Journal. "In its place looms the prospect of continuous trade war driven not by traditional alliances and ideology, but the priorities of the day."
That's a stark statement, but research from DataTrek shows President Donald Trump's actions are "not a real surprise" to investors.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The standard deviation for daily S&P 500 price returns is 1.1% over the trailing 10 years. According to DataTrek co-founders Nick Colas and Jessica Rabe, daily moves of less than 1% this past Friday (-0.5%) and Monday (-0.8%) were "entirely normal" and indicate "markets were not entirely surprised by whatever has just happened."
Indeed, the early data show "investors are largely seeing through worrisome trade war headlines."
Meanwhile, according to FactSet, with 36% percent of its components reporting actual results through Friday, 77% of S&P 500 companies have reported a positive earnings per share surprise and 63% have reported a positive revenue surprise.
"The blended (year-over-year) earnings growth rate for the S&P 500 is 13.2%," notes FactSet Senior Earnings Analyst John Butters. "If 13.2% is the actual growth rate for the quarter, it will mark the highest (year-over-year) earnings growth rate reported by the index since Q4 2021."
At the closing bell, the tech-heavy Nasdaq Composite was up 1.4% to 19,654. The broad-based S&P 500 Index added 0.7% to 6,037. And the blue-chip Dow Jones Industrial Average was higher by 0.3% to 44,556.
Labor market data is stable
The first Jobs Friday of 2025 is looming at the end of this week's economic calendar. In the interim, we'll see the private ADP employment summary on Wednesday and weekly initial jobless claims numbers on Thursday.
Today, Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics showed that job openings decreased by 556,000 to 7.6 million on the last business day of December.
"Today's JOLTS readings are unlikely to have a significant effect on the Fed's overall policy outlook," writes Barclays Senior U.S. Economist Jonathan Millar. The economist expects policymakers to hold interest rates steady at the next Fed meeting, citing a resilient economy and 100 basis points of cuts to the target range for the federal funds rate since September.
"Indeed," Millar adds, "we think the bar for cuts at upcoming meetings remains elevated unless the data present evidence of an abrupt deterioration in activity or labor market conditions."
Merck has trouble in China
Merck & Co. (MRK) was the worst performer among the 30 Dow Jones stocks on Tuesday, sliding 9.1% after management reported that sales of Gardasil, its second-best-selling drug, declined by 18% during the fourth quarter and that shipments of the HPV vaccine to China are on hold through at least the middle of 2025. MRK has been sliding since late July on talk of its Gardasil trouble in China.
But the big problem for Merck stock could be Keytruda, the pharma giant's blockbuster cancer treatment. "The reaction also seems due to two questions that have nothing to do with the vaccine," posits STAT senior writer Matthew Herper. "How much should investors expect sales of Keytruda, the best-selling drug in the world, to decline in the coming years? And can they trust Merck's guidance on that decline?"
Merck stock has generated a negative total return of nearly 20% over the trailing 12 months. And yet Wall Street is bullish on MRK.
Of the 26 analysts who cover the healthcare stock that are tracked by S&P Global Market Intelligence, 14 rate it a Strong Buy and five say it's a Buy. Seven have it at Hold. The average 12-month price target is $123.97, 36.6% upside from Tuesday's closing price.
AI revolution drives Palantir stock
Palantir Technologies (PLTR) stock surged 24% and was the top-performing stock in the S&P 500 after the AI software provider beat top- and bottom-line expectations for its fourth quarter and issued a better-than-expected outlook for its first quarter and full year.
CEO Alex Karp highlighted "our deepening position at the center of the AI revolution," noting that "our early insights surrounding the commoditization of large language models have evolved from theory to fact." Palantir is seeing momentum in commercial and government sectors "unlike anything that has come before." And this "revolution," Karp intones, "will play out over years and decades."
Wall Street is in wait-and-see mode with Palantir after an explosive run, with 13 analysts rating the stock Hold. Two analysts have it at Strong Buy, and one calls PLTR a Buy. Four rate it a Sell, and two have it as a Strong Sell.
Downside from here based on an average 12-month price target of $57.26 is 44.9%.
Related content
- What Stocks Are Politicians Buying and Selling?
- Buffered ETFs: What Are They And Should You Invest in One?
- What Vanguard's Massive Fee Cut Means for Investors
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

David Dittman is the former managing editor and chief investment strategist of Utility Forecaster, which was named one of "10 investment newsletters to read besides Buffett's" in 2015. A graduate of the University of California, San Diego, and the Villanova University School of Law, and a former stockbroker, David has been working in financial media for more than 20 years.
- Joey SolitroContributor
-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's Executives
Feeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
Stock Market Winners and Losers of the 'Big, Beautiful' Bill
Defense, manufacturing and tech should prosper, while health care and green energy stocks face hurdles.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have Millions
Private market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It Helps
Saving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
With Buffett Retiring, Should You Invest in a Berkshire Copycat?
Warren Buffett will step down at the end of this year. Should you explore one of a handful of Berkshire Hathaway clones or copycat funds?
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard About
Timing is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.