US stocks rise on Trump’s delayed tariff plan

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CNN
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U.S. stocks opened higher on Tuesday in the first full day of Donald Trump’s second presidency, as traders weathered a flurry of orders that so far point to less aggressive action in trading.

The Dow rose 170 points, or 0.39%. The S&P 500 rose 0.49% and the tech-heavy Nasdaq Composite rose 0.52%.

President Trump said Monday at a signing ceremony in the Oval Office that his administration would impose a 25% tariff on Mexico and Canada starting Feb. 1. He did not mention a tariff on China, the United States’ largest trading partner.

When asked about tariffs against China at a signing ceremony in the Oval Office on Monday, Trump noted that the sweeping tariffs he imposed during his first term were still in effect after former President Joe Biden largely abandoned them left in force.

Trump also suggested that the U.S. would impose tariffs on China if Beijing did not agree to a deal on TikTok, which faces a ban in the U.S. over national security questions and violating the First Amendment.

The dollar, which has gained in recent months in anticipation of Trump’s second term, was largely unchanged on Tuesday morning after rising on news of Trump’s proposed tariffs.

WTI crude oil, the U.S. benchmark, fell 2.5% early Tuesday after Trump announced executive orders focused on lifting regulations and allowing oil production in the United States.

The yield on the 10-year Treasury note fell, which was a good sign for stocks.

Analysts at Morgan Stanley said in a note Tuesday that Trump’s focus on tariffs as early as Feb. 1 was a reminder that “vigilance is warranted” as markets try to keep track of Trump’s flurry of policy decisions.

The S&P 500 gained nearly 4% from Trump’s election in November through Inauguration Day, according to Sam Stovall, chief investment strategist at CFRA Research. That was the 11th best performance since 1944 during the “post-election honeymoon period,” he wrote in a note.

According to Stovall, positive performance during this period signaled gains nearly 80% of the time, both in the first 100 days of the presidency and throughout the year.

Investors will be eager to see whether the good times can continue under the Trump administration.

Bitcoin fell nearly 3% after rising to a record high above $109.00 on Monday. Trump didn’t mention the cryptocurrency in his inaugural speech, although he and his wife, first lady Melania Trump, each released their own meme coins over the weekend.

Wall Street was closed on Monday to mark Martin Luther King Jr. Day.

This is a developing story and will be updated.