President Trump's pause on tariffs against Mexico and Canada brought a temporary relief to the stock market, allowing investors to focus on corporate earnings. However, Alphabet and AMD, two tech giants, disappointed investors with their fourth-quarter performance. Alphabet's revenue fell short of expectations, while AMD's data center sales missed estimates, leading to a drop in both companies' share prices.
U.S. President Donald Trump on Monday paused tariffs on Mexico and Canada , but notably, not China, and in doing so, also stemmed the dip in stocks, at least for now. Major U.S. benchmarks snapped a two-day losing streak in a relief rally. With the temporary respite in U.S. tariffs on key countries, investors could turn their attention to earnings. But what they saw on Tuesday wasn't likely to comfort them after the turmoil wreaked by tariffs.
Alphabet's scorecard for its fourth-quarter performance missed the 'A' grade so many expect from Big Tech names. Meanwhile, AMD's data center sales, a key part of its business, missed estimates. Investor disappointment was immediate: Shares of both companies slumped in extended trading, signaling that corporate fundamentals remain critical to stock performance, causing shares to fall as much as 9% in extended trading. The tech giant's revenue came in at $96.47 billion, compared with $96.56 billion expected by LSEG. CEO Sundar Pichai said in the earnings release that Google expects to invest 'approximately,' which missed the FactSet estimate of $4.14 billion. Net income came in at $482 million, down from $667 million a year ago. The chipmaker, however, beat Wall Street expectations for overall sales and earnings. On Tuesday, reported net profit attributable to shareholders of $770 million, compared with a $483 million estimate in a company-provided consensus estimate and with a mean forecast of $886.4 million in a LSEG poll of analysts. The bank also announced plans to U.S. job openings in December tumbled to 7.6 million, the lowest since September, and below the Dow Jones estimate for 8 million, the Bureau of Labor Statistics said in its monthly report. The report comes just a few days ahead of the nonfarm payrolls data for January. That is expected to show an addition of 169,000 jobs, with the unemployment rate holding steady at 4.1%. is up nearly 10% for the year so far. Wood also told CNBC she's moving away from hardware, and looking at software plays in the artificial intelligence space. The Fed could find itself in a policy Catch-22 if tariffs spike inflation and slow growth When Trump launched tariffs in his first term, inflation was low and the Fed was raising rates as it sought a 'neutral' level. A manufacturing recession ensued in 2019. This time around, the targeted tariffs that Trump had previously used have been replaced by the threat of blanket duties — which could slow growth and raise prices, putting the U.S. Federal Reserve in a position where it has to weigh economic expansion against controlling inflation
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