Major United States benchmark averages saw a strong rally on Tuesday (Wednesday AEDT), with investors responding positively to President Donald Trump’s first-day actions and comments on international trade, which were perceived as less aggressive than initially feared.
During Tuesday's regular session, the Dow Jones Industrial Average surged 538 points or 1.2% to close at 44,025.8, the S&P 500 gained 52.6 points or 0.9% to finish at 6,049.2, and the Nasdaq Composite rose 126.6 points or 0.6% to 19,756.8.
Major technology stocks saw gains, with Amazon and Nvidia climbing 2.1% and 2.3%, respectively. However, a more than 3.2% drop in Apple, following two Wall Street downgrades, limited the Nasdaq’s overall progress.
Among individual companies, 3M jumped over 4.2% after reporting earnings that exceeded analysts’ expectations.
On his first day back in the Oval Office, Trump signed executive orders related to international trade and tariffs. He floated the possibility of imposing 25% tariffs on Mexico and Canada, citing their border policies, and mentioned potential tariffs on China if a TikTok deal isn’t approved.
Despite this, Trump stopped short of implementing new tariffs, instead issuing a memorandum directing federal agencies to review what he considers unfair trade practices by foreign nations.
Trump’s broader trade rhetoric remained ambiguous, particularly regarding China, leaving the door open for future policy shifts.
Meanwhile, Wall Street is closely monitoring Trump’s pro-business agenda, which includes promises of deregulation. Banking stocks, small caps, energy shares, and even bitcoin - all key components of the so-called "Trump trade" - remain sensitive to his administration’s decisions.
Among his first actions, he declared a national energy emergency to increase fossil fuel production, a move likely to bolster energy stocks further.
On the bond markets, 10-year and 2-year rates eased 1.1% and 0.2% to 4.572% and 4.274%, respectively.