Live: Vanguard S&P 500 ETF (VOO) Ignores Tariffs, Rises on Bank Earnings

The stock market is shrugging off the latest salvo between the U.S. and China over trade. All stock indices opened slightly higher at the morning bell, with the Vanguard S&P 500 ETF (NYSEARCA:VOO) up 0.7%.

China raised its tariffs on U.S. goods to 125%, matching the rate President Trump had imposed on Chinese imports. Beijing, though, said it no longer matters what further increases the U.S. hits it with as it will not respond because “Given that, at the current tariff level, U.S. exports to China are no longer commercially viable, China will not respond to any further tariff hikes by the U.S. on Chinese goods.”

With Trump having essentially eliminated the de minimis rule that Chinese marketplaces like Temu and Schein used to ship cheap goods to the U.S. duty-free, it’s not unreasonable to say trade between the U.S. and China is dead.

Big names bolster market

Although most components of the Vanguard ETF are down, the biggest components of the index are moving higher. Nvidia (NASDAQ:NVDA), representing the second largest position in the exchange-traded fund at over 6%, is up more than 2%, helping to drive the ETF higher.

Even though top dog Apple (NASDAQ:AAPL) is in the red, it is almost at break-even so its impact is negligible.

Yet some components are up strongly in morning trading. Broadcom (NASDAQ:AVGO), which is the eighth largest position, is up 3.4%. The AI chipmaker’s stock has held up better than most over the tumultuous week with shares 22% higher.

Banking on trading turmoil

What is buoying stocks this morning are the results of bank stock earnings starting to come in with giants like JPMorgan Chase (NYSE:JPM) reported record revenue on higher trading despite caution over economic headwinds. JPM stock represents 1.5% of VOO’s portfolio, just behind 10th place Tesla (NASDAQ:TSLA) at 1.6%. JPMorgan is up 2% in morning trading.

Other financial stocks in the Vanguard S&P 500 ETF that reported earnings today include Wells Fargo (NYSE:WFC) and Morgan Stanley (NYSE:MS), both of which had better than expected results.

Yet banks were also being very cautious and were setting aside larger amounts for credit losses. It suggests they foresee tougher times coming and are preparing for the worst.

JPMorgan’s provision for credit losses in the fourth quarter rose to $3.3 billion from $2.6 billion. Wells Fargo’s provision, however, was lower than expected. It set aside $932 million, less than the $1.2 billion Wall Street wass anticipating. Morgan Stanley’s credit loss provision was just $135 million, but it is markedly higher than the $6 million et aside in its year-ago first quarter.

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