Stock futures were slightly lower on Tuesday after China slapped tariffs on U.S. imports, retaliating to U.S. duties on exports from Beijing.

Market Snapshot

At 8:00 a.m. ET, Futures tied to the Dow Jones Industrial Average were down 82 points, or about 0.2%, while S&P 500 futures traded around the flatline. Meanwhile, Nasdaq-100 futures were up 0.1%.

Pre-Market Movers

Tesla Motors was up 0.4% in premarket trading after shares of the electric-vehicle giant slumped 5.2% on Monday. The stock closed lower after it was announced that tariffs levied on Mexico by the U.S. would be delayed by a month but before President Donald Trump struck a similar deal with Canada. The electric-vehicle maker assembles all its vehicles for the U.S. market in the U.S. but about 15% of the parts in a Model Y sold in the U.S. come from Mexico.

Shares of NVIDIA, the leading maker of artificial-intelligence chips, were rising 0.4%. Nvidia declined 2.8% on Monday as Wall Street gauged the potential effects of the Trump administration's tariffs on chip companies and amid continued worries over AI advancements made by China's DeepSeek. Taiwan Semiconductor Manufacturing rose 3%, Advanced Micro Devices rose 1.5%.

SUPER MICRO COMPUTER INC rose 6%. The maker of AI servers said it would be providing a fiscal second-quarter " business update" on Feb. 11. The Nasdaq Stock Market told the company in November that it wasn't in compliance with a listing rule requiring timely filing of reports with the Securities and Exchange Commission. In early December, the company said it expected to file its delayed financial statements by Feb. 25.

Pepsi posted fourth-quarter adjusted earnings of $1.96 a share, beating analysts' estimates of $1.94 but the stock fell 1.8% after revenue declined 0.2% from a year earlier to $27.78 billion and missed expectations of $27.89 billion. Shares fell 2.1%.

Merck was falling 8% after the drug maker reported fourth-quarter adjusted earnings that beat analysts' estimates but issued guidance for f2025 that missed expectations. Merck said it expects 2025 adjusted earnings of $8.88 to $9.03 a share, below consensus of $9.21.

Pfizer was up 2.1% after fourth-quarter adjusted earnings of 63 cents a share topped analysts' forecasts of 46 cents and the company reaffirmed guidance for 2025.

PayPal was down 6%. The fintech beat fourth-quarter earnings and sales estimates, and said total payment volume rose 7% in the quarter, while payment transactions decreased 3%.

Market News

Palantir Bear Morgan Stanley Upgrades Rating but Still Doesn’T Call AI Firm a Buy

Morgan Stanley has finally conceded that Palantir Technologies Inc. is not a stock to sell, but its analysts aren’t quite ready to call it a buy either.

Analysts led by Sanjit Singh lifted Palantir’s rating to equal weight from underweight and boosted the price target to $95 from $60, following the company’s fourth-quarter results and 2025 outlook.

Palantir’s revenue growth accelerated, to 36% from 30% in the third quarter, as several key performance indicators also improved. The company also guided for fiscal-year revenue growth of 31%, which was well ahead of consensus expectations of mid-20% growth.

“Surprising to us was the strength of the 2025 outlook, despite the tough compares next year particularly in the government business. Management highlighted that it expects another good year in government and should prove to be an ultimate beneficiary of the ongoing government efficiency initiatives,” said the analysts.

Valuation, however, is still a concern, at an estimated 52 times calendar 2026 sales and 120 times 2026 free cash flow.

Spotify Beats on Subscribers, Records First Annual Profit

Spotify Technology S.A. posted another quarter of better-than-expected subscriber growth, with the Swedish music company recording its first-ever annual profit. Shares of Spotify Technology jumped 9%.

Total active monthly users increased to 675 million, Spotify said in a statement on Tuesday. That compared with the average Wall Street estimate of 664.9 million, according to analysts surveyed by Bloomberg. Paying customers grew to 263 million, also surpassing expectations.

Chief Executive Officer Daniel Ek was able to deliver the first full-year profit in Spotify’s history, reporting net income of about €1.14 billion ($1.2 billion) for all of 2024. The results show Spotify’s efforts to control costs after diversifying into new offerings are paying off. The shares rose 138% last year as co-founder Ek and prioritized profitability after years of expanding into audiobooks and podcasting.