NEW YORK: Wall Street’s main indexes rose on Tuesday, with the blue-chip Dow at a more than one-month high, as investors assessed President Donald Trump’s executive orders after taking office and awaited his first move on trade policy.
Trump did not lay out any concrete plans on the universal tariffs and additional surcharges on close trade partners as previously promised, but said he was thinking about imposing duties on Canadian and Mexican goods as early as Feb. 1.
While investors remain cautious about Trump’s tariff policies, which could spark a global trade war and fresh inflation pressures, brokerage Goldman Sachs lowered its forecast for a universal tariff this year to 25% from about 40% seen in December.
“Trump is all about getting deals, and that is what he is seeking to do with his tariffs,” said Dan Boardman-Weston, CEO at BRI Wealth Management.
“So assuming that any government sits down with him and tries to work on a compromise, the tariffs will not be as severe as people were may be expecting.”
At 11:46 a.m. ET the Dow Jones Industrial Average rose 396.33 points, or 0.91%, to 43,884.16, the S&P 500 gained 28.95 points, or 0.48%, to 6,025.61 and the Nasdaq Composite gained 17.53 points, or 0.09%, to 19,647.73.
Nine of the 11 S&P 500 sectors rose, with industrials leading with a 1.8% increase. The equally-weighted S&P 500 index added 1% and hit a one-month high.
The domestically focused small-cap Russell 2000 index rose 1.5% to touch a one-month high.
Shares of automakers, which are most sensitive to tariffs due to their vast supply chains, rose. Ford gained 1.7%, while General Motors added 4.7%, following a rating upgrade by Deutsche Bank.
During the first year of Trump’s earlier administration, the S&P 500 rose 19.4%, while the benchmark index rose nearly 68% through his four-year term, but saw bouts of volatility, stemming in part from a trade war Trump fought with China.
Last week, the S&P 500 and Dow registered their biggest weekly percentage gains since early November, helped by strong bank earnings and signs that underlying inflation was cooling.
However, inflation is still above the Federal Reserve’s 2% target, and fuelling worries that Trump’s policies could delay the central bank’s pace of monetary policy easing.
Economists see the Fed leaving borrowing costs unchanged when it meets next week and traders see the first interest rate cut coming in July, according to data compiled by LSEG.
Tech stocks fell, with Apple sliding 4.5% after brokerage Jefferies cut its rating to ‘underperform’.
3M rose 4.5% after posting upbeat fourth-quarter profits.
Walgreens fell 13.6% after the Justice Department accused it of filling unlawful prescriptions for addictive painkillers and other drugs.
Moderna rose 6% after securing $590 million from the US to hasten development of its bird flu vaccine.
Advancing issues outnumbered decliners by a 4.64-to-1 ratio on the NYSE, and by a 2.18-to-1 ratio on the Nasdaq.
Comments