US stocks traded in the green on Tuesday, but tech lagged as investors digested President Donald Trump’s first policy moves, with future tariffs on Mexico and Canada front of mind.
The Dow Jones Industrial Average (^DJI) and the benchmark S&P 500 (^GSPC) moved up roughly 0.6% and 0.4%, respectively. But the Nasdaq Composite (^IXIC) was broadly flat as the likes of Tesla (TSLA) and Nvidia (NVDA) struggled.
Wall Street is bracing for volatility as the new president storms ahead with executive orders and actions, with energy and trade center stage. It’s the first day of trading in Trump’s second term, as US markets were closed Monday for the Martin Luther King Jr. holiday.
Markets got a dose of relief as Trump held off from firing off the barrage of universal tariff hikes expected by many on his first day in office. China got a surprise reprieve as Trump failed to act on promised high duties on its imports. US stock futures rose, and the dollar (DX-Y.NYB) pulled back from a near two-year high on Monday.
But the mood shifted after Trump said later in the day that he was looking at imposing 25% duties for Mexico and Canada starting Feb. 1. And Chinese stocks (000300.SS) closed out Tuesday with only slight gains, suggesting investors aren’t convinced that a US-China reset is coming to avert a trade war.
Meanwhile, the 10-year Treasury yield (^TNX) fell about 4 basis points to around 4.57% early on Tuesday, recovering somewhat from a deeper drop in Asia trading.
Bitcoin (BTC-USD) has been on a ride, rising to a record higher above $109,000 on Monday as Trump was sworn in and the new president issued an official TRUMP “meme coin” token. The leading digital currency then fell steeply early Tuesday after a hoped-for pro-crypto push failed to appear in the first policy actions. It was trading lower but still above $103,000 at last check.
The next batch of quarterly earnings will provide more food for thought for investors. Netflix (NFLX) is expected to deliver strong results when it reports after the bell.
Meanwhile, earnings at Charles Schwab (SCHW) soared nearly 50% as trading activity climbed by double digits. D.R. Horton (DHI) also beat expectations despite a soft housing market, while 3M Company (MMM) issued optimistic full-year guidance, driven by organic sales growth.
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