Stocks rose as traders closely watched Trump’s earlier tariffs.
-
Stocks rose and bond yields fell on Tuesday as traders eyed developments on trade policy.
-
Investors were relieved by Donald Trump’s soft approach on tariffs on his first day in office.
-
The president also introduced his pro-business and deregulation agenda.
U.S. stocks gained on Tuesday after Donald Trump’s surprise implementation of tariffs on his first day of policy actions dampened the bull rally.
Trump announced on February 1 that he was considering implementing 25% tariffs on Mexico and Canada, but his executive order on the matter actually stopped him from imposing any new tariffs on imports. The president instead directed the federal government to investigate the effects of unfair trade and currency practices.
Markets saw the order as a day of heavy-handed action on foreign trade issues, which Trump had campaigned heavily in the run-up to the election.
The president has vowed to impose major tariffs on all U.S. trade, threatening higher tariffs on China, Mexico and Canada. But Trump’s first steps since taking office on Monday suggest a softer-than-expected approach.
“Trump’s comments on China have been less hawkish than his recent comments during the presidential campaign or since the election,” Goldman Sachs wrote Tuesday. “And if we see a ‘universal tariff’ as a clear risk, the comments suggest it is a lower priority than we now expect.”
Bond yields and the dollar fell on the news. The 10-year Treasury yield was up two basis points to 4.584% on Tuesday morning. The dollar index, which measures the U.S. currency against a basket of peers, fell 0.9 percent to $108.39.
Stocks were also helped by signs that Trump’s presidential rhetoric will be seen as a pro-business and deregulation agenda, signaling to investors that Trump’s trade is still alive. on him First dayThe president has declared a national energy emergency and established regulatory limits to encourage US fossil fuel production.
Here’s where U.S. indexes stood at the opening bell at 9:30 a.m. on Monday:
Here’s what else is going on: