Market Rally Continues as Trump Unveils Policy Moves
The US stock market continued its upward trend on Tuesday, with the Dow Jones Industrial Average and the S&P 500 rising by approximately 0.6% and 0.4%, respectively. However, the tech-heavy Nasdaq Composite remained flat, weighed down by struggling giants like Tesla and Nvidia.
Trade and Energy Take Center Stage
As President Donald Trump begins to implement his executive orders, investors are bracing for volatility. The focus is on trade and energy, with the new administration’s policies expected to have a significant impact on these sectors.
Relief and Then Disappointment
Markets initially breathed a sigh of relief as Trump held off on imposing universal tariff hikes on his first day in office. China, in particular, was spared from expected high duties on its imports. However, this optimism was short-lived, as Trump later announced plans to impose 25% duties on Mexico and Canada starting February 1.
Cryptocurrency Rollercoaster
Bitcoin, which reached a record high above $109,000 on Monday, plummeted early Tuesday after Trump’s first policy actions failed to include a pro-crypto push. The digital currency is currently trading above $103,000.
Earnings Season Heats Up
The next batch of quarterly earnings is expected to provide valuable insights for investors. Netflix is set to report strong results after the bell, while Charles Schwab’s earnings soared nearly 50% due to increased trading activity. D.R. Horton also beat expectations despite a soft housing market, and 3M Company issued optimistic full-year guidance driven by organic sales growth.
Tesla Takes a Hit
Tesla’s stock sank over 4% in early trading Tuesday, reversing premarket gains, after Trump revoked a pro-EV policy put in place by his predecessor. The policy had mandated that half of new US cars manufactured be electric by 2030. Other EV stocks, such as Lucid and Rivian, also fell on the news.
General Motors and Ford Buck the Trend
While EV stocks struggled, General Motors and Ford stocks rose, suggesting that investors are optimistic about their prospects in a post-EV policy world.
Economic Data and Earnings
There were no notable economic data releases on Tuesday. However, several companies are set to report earnings, including Netflix, 3M Company, Capital One, and United Airlines.
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