Dow gains 537 points as markets react to Trump's first-day actions and trade policy signals
On Tuesday, US stocks rose as investors assessed President Donald Trump’s initial actions and comments on international trade, which appeared less aggressive than anticipated, according to CNBC.
The Dow Jones Industrial Average increased by 537.98 points, or 1.24 percent, closing at 44,025.81. The S&P 500 added 0.88 percent to reach 6,049.24, while the Nasdaq Composite climbed 0.64 percent to 19,756.78.
Small-cap stocks participated in the rally, with the Russell 2000 advancing approximately 1.9 percent.
3M shares rose over 4 percent after reporting earnings that exceeded analyst expectations. Large technology stocks also contributed to market gains, with Amazon and Nvidia each advancing by more than 2 percent.
However, a decline of over 3 percent in Apple’s shares, driven by two Wall Street downgrades, limited the Nasdaq’s overall gains.
Trump signed a memorandum on Monday night directing federal agencies to review what he described as unfair trade practices.
While he raised the possibility of 25 percent tariffs on Mexico and Canada due to their border policies and mentioned potential tariffs on China related to the TikTok deal, no immediate levies were enacted.
This was viewed by some investors as a sign of a less aggressive stance on trade policy.
Alec Phillips, chief US political economist at Goldman Sachs, stated, “President Trump’s Inauguration Day policy announcements on tariffs were more benign than expected.”
While Trump’s remarks on Canada and Mexico were stronger than anticipated, Phillips noted that the absence of immediate tariffs reduced concerns about wide-ranging trade restrictions and inflation risks.
Phillips added that the likelihood of universal tariffs on imports this year seems lower, offering cautious optimism to traders.
Trump’s inaugural address framed his administration as ushering in a period of growth and success while criticising the Biden Administration.
He declared a national energy emergency to increase fossil fuel production, aligning with his campaign priorities.
Investors remain focused on whether Trump will follow through on his pro-business campaign statements, particularly on deregulation, which previously bolstered banking stocks after his 2016 election.
Key sectors, including small caps, oil stocks, and cryptocurrencies like bitcoin, continue to respond to Trump’s policy signals and their potential economic impact.
