Trump's Tariff on Canadian and Mexican Imports Sparks Inflation Fears; Apple and Vertex Surge Amid Positive Earnings and FDA Approval | MarketReader Minute

Trump's 25% tariff on Canadian and Mexican imports sparks inflation fears, while mixed U.S. economic data prompts investor caution ahead of key PCE index release; European markets rise post-ECB rate cut despite weak German retail sales.

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Friday, January 31

Some of the largest macro moves in the market today: Ethereum +3.3%. Nasdaq 100 Index (US) +0.9%. S&P 500 Index (US) +0.6%. Noteworthy US mega-cap moves today: Apple Inc (AAPL) +4.2%. Broadcom Inc (AVGO) +2.0%. Visa Inc (V) +1.6%. 

Recent market movements are significantly influenced by U.S. President Donald Trump's announcement of a 25% tariff on imports from Canada and Mexico, effective February 1st. This decision has raised concerns about potential inflationary pressures in the U.S., as well as fears of escalating trade tensions with BRICS nations if they attempt to establish an alternative currency system.

In economic data releases, personal spending in the United States rose by 0.7% month-over-month for December, surpassing expectations and indicating robust consumer activity despite mixed signals regarding overall economic growth; Q4 GDP was reported at a lower-than-expected annualized rate of 2.3%. Additionally, upcoming reports such as the Personal Consumption Expenditures (PCE) price index will be closely monitored for insights into inflation trends that could impact Federal Reserve policy decisions moving forward.

European markets have reacted positively following recent interest rate cuts from the European Central Bank (ECB), which lowered rates amid softening German retail sales figures and rising unemployment levels—now at their highest since October 2020—but still managed gains across major indices like Germany's DAX and France’s CAC40 due to strong earnings reports bolstering investor sentiment.

Ethereum (ETH/USD) [+3.3%]
Ethereum (ETH/USD) has recorded a daily return of approximately 3.3%, amid notable volatility in cryptocurrency markets. While Bitcoin experienced an initial surge followed by a retreat, Ethereum maintained upward momentum with nearly a 4% increase over the past 24 hours. Recent developments include the SEC's approval of Bitwise's Spot Bitcoin and Ethereum ETF, which aims to offer regulated exposure to both cryptocurrencies. Additionally, the SEC has granted initial approval for a combined Bitcoin and Ethereum ETF. The Hong Kong SFC has also issued its first license for four crypto assets, including ETH, signaling progress towards mainstream adoption. Social media discussions highlight significant purchases of ETH and BTC, with mentions of substantial ETH options at a $3.3K max pain level, valued at approximately $1.96 billion. An update from the Ethereum client Geth was released to address vulnerabilities, further contributing to the current market dynamics.

Invesco QQQ Trust Series I (QQQ) [+0.8%]
The Invesco QQQ Trust Series I (NASDAQ:QQQ) saw a price increase of 0.80% in premarket trading, reaching $527.22. This rise aligns with a positive sentiment in U.S. stock futures, bolstered by strong corporate earnings, particularly from Apple Inc., which reported better-than-expected first-quarter results and experienced a significant premarket gain. Concurrently, U.S. equity funds recorded inflows of $5.58 billion, reflecting optimism regarding potential rate cuts and a rebound in the technology sector. Notably, the top contributors to QQQ's performance included Apple, Microsoft, and Vertex Pharmaceuticals, the latter receiving FDA approval for a new pain medication. Analysts have also raised price targets for Apple following its earnings report, highlighting future catalysts such as new product releases and updates. Investors remain attentive to upcoming economic data releases that may further influence market dynamics.

AAPL | +4.2% | +158.1B
Apple Inc | Technology Hardware, Storage & Peripherals

Apple Inc. has seen a notable price increase, coinciding with a significant upward movement in the Technology Hardware, Storage & Peripherals sector. Following its recent earnings report, several analysts have raised their price targets for Apple, with Rosenblatt setting a target of 263, Evercore ISI Group at 260, B of A Securities at 265, and JP Morgan at 270. Despite an 11% decline in Greater China revenue to 18.51 billion, CEO Tim Cook attributed half of this drop to inventory management rather than demand issues. Apple's Q1 results showed revenue of 124.3 billion, surpassing expectations, with an earnings per share of 2.40, slightly exceeding the anticipated 2.36. Additionally, discussions on social media have highlighted potential advertising tests on Elon Musk's X platform and the upcoming release of the next-generation iPhone SE4, which may serve as catalysts for further growth.

VRTX | +3.4% | +4.0B
Vertex Pharmaceuticals Inc | Biotechnology

Vertex Pharmaceuticals Inc announced the U.S. Food and Drug Administration's approval of Journavx (suzetrigine), an oral, non-opioid pain signal inhibitor for adults with moderate-to-severe acute pain. This approval, granted on January 30, 2025, introduces the first new class of pain medicine in over two decades, with a wholesale price set at $15.50 per 50-milligram pill. Following this announcement, Vertex shares rose significantly in after-hours trading. Additionally, the company secured a reimbursement agreement with NHS England for its sickle cell disease therapy, Casgevy, which follows positive guidance from the National Institute for Health and Care Excellence, enhancing treatment access for eligible patients. Social media discussions have highlighted both the FDA approval and the reimbursement agreement, noting potential sales exceeding $1.5 billion annually by 2030 for Journavx, despite some concerns regarding its effectiveness compared to existing treatments.

TEAM | +19.7% | +16.4B
Atlassian Corp | Application Software

Atlassian Corp (NASDAQ: TEAM) reported its second-quarter fiscal results on January 30, 2025, with an adjusted EPS of $0.96, surpassing the consensus estimate of $0.76 by a notable margin. Revenue for the quarter reached $1.29 billion, exceeding expectations of $1.24 billion and reflecting a 21% year-over-year increase. Subscription revenue rose 30% to $1.21 billion. The company raised its fiscal year 2025 revenue growth projection to 18.5% to 19%, up from the prior forecast of 16.5% to 17%. For the third quarter, Atlassian anticipates revenue between $1.345 billion and $1.353 billion, above analyst estimates of $1.32 billion. Following the earnings report, shares surged over 19% in after-hours trading, with discussions on social media highlighting the strong performance and positive guidance.

KLAC | +4.1% | +4.3B
KLA Corp | Semiconductor Materials & Equipment

KLA Corp reported its Q2 results on January 30, 2025, achieving an adjusted EPS of 8.20, surpassing the consensus estimate of 7.76, alongside revenue of 3.08 billion, exceeding expectations of 2.95 billion. This performance marked a significant increase in both EPS and revenue compared to the previous year. The company provided guidance for Q3, projecting adjusted EPS between 8.05 and 8.65, and revenue of approximately 3 billion, plus or minus 150 million, also above consensus estimates. Following these announcements, KLA's stock experienced a notable increase in after-hours trading. Discussions on social media highlighted the CEO's comments regarding stability in revenue and growth prospects for 2025, reflecting a positive market reaction to the earnings report.

ABBV | +5.0% | +16.4B
Abbvie Inc | Biotechnology

AbbVie reported strong fourth-quarter financial results, with adjusted earnings per share of $2.16, exceeding estimates of $2.11, and revenues of $15.10 billion, surpassing the consensus of $14.83 billion. Notably, sales from Skyrizi and Rinvoq were significant growth contributors, generating $3.78 billion and $1.83 billion, respectively. The company raised its long-term revenue outlook for these products to over $31 billion by 2027. AbbVie also reaffirmed expectations for high single-digit compound annual revenue growth through 2029 and projected adjusted EPS for fiscal 2025 between $12.12 and $12.32, aligning with analyst forecasts. Social media discussions highlighted these results, noting a year-over-year revenue increase of 5.6% and emphasizing performance in immunology, although Humira sales fell short of expectations. Following the earnings announcement, AbbVie's stock experienced a notable price movement, increasing by 5.0%.

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