Market Momentum Builds as Trump Unveils Policy Agenda
The US stock market surged on Tuesday, with investors reacting to President Donald Trump’s initial wave of executive orders and the looming threat of historic tariffs on Mexico and Canada. The Dow Jones Industrial Average and the S&P 500 index both rose around 0.5% and 0.4%, respectively, while the Nasdaq Composite climbed approximately 0.5%, driven by tech giants like Nvidia.
Trade Tensions Simmer
Despite initial relief that Trump didn’t impose universal tariff hikes on his first day in office, investors are now bracing for potential volatility as the new president pushes forward with his policy agenda, focusing on energy and trade. The surprise reprieve for China has been tempered by Trump’s announcement that he’s considering 25% duties on Mexican and Canadian imports starting February 1.
Currency and Bond Markets React
The US dollar retreated from a near two-year high on Monday, while the 10-year Treasury yield fell about 5 basis points to around 4.56% early on Tuesday. However, the yield recovered somewhat later in the day.
Cryptocurrency Rollercoaster
Bitcoin experienced a wild ride, reaching a record high above $109,000 on Monday before plummeting early Tuesday after Trump’s initial policy actions failed to include a pro-crypto push. The digital currency has since recovered, trading slightly higher at around $104,000.
Earnings Season Heats Up
The next batch of quarterly earnings reports will provide further insight for investors. Netflix is expected to deliver strong results, while Charles Schwab’s earnings soared nearly 50% due to increased trading activity. D.R. Horton beat expectations despite a soft housing market, and 3M Company issued optimistic full-year guidance driven by organic sales growth.
Key Earnings Reports
- Netflix (NFLX)
- 3M Company (MMM)
- Capital One (COF)
- Charles Schwab (SCHW)
- D.R. Horton (DHI)
- KeyCorp (KEY)
- Interactive Brokers Group (IBKR)
- United Airlines (UAL)
- Zions Bancorporation (ZION)
Overnight News
- BofA chief predicts the Fed may need to respond to Trump’s policies
- Apple’s iPhone sales in China dropped 18% in the holiday quarter
- Trump considers historic 25% tariffs on Canada and Mexico
- Investors prepare for stock laggards to rally on Trump bets, according to BofA
- 3M stock rises as Q4 profit beats estimates on strong demand
- Huawei aims to grab market share in AI chips from Nvidia in China
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