U.S. stocks traded higher on Tuesday as investors evaluated President Donald Trump's initial policy decisions, with potential tariffs on Mexico and Canada taking center stage.
The Dow Jones Industrial Average (^DJI) outperformed, climbing roughly 1%, driven by strong earnings from 3M Company (MMM). The stock surged over 5% following upbeat full-year guidance, making it the Dow's top performer.
Markets found some relief as President Trump refrained from immediately implementing the broad tariff hikes many had anticipated on his first day in office.
However, sentiment shifted later in the day when Trump announced plans to consider 25% tariffs on imports from Mexico and Canada starting February 1. Meanwhile, Chinese stocks (000300.SS) ended Tuesday with modest gains, reflecting skepticism among investors about a potential U.S.-China reset to prevent a trade war.
The 10-year Treasury yield (^TNX) dipped approximately 4 basis points to around 4.57%, partially recovering from a steeper decline during Asian trading.
The upcoming round of quarterly earnings promises to offer investors additional insights. Netflix (NFLX) is anticipated to report robust results after the market close.
In contrast, Charles Schwab earned (SCHW)showed.
Donald Trump has returned to the White House, leaving investors with plenty to digest.
On Monday, his first day in office, President Trump signed executive orders reshaping border, energy, and diversity policies. While he held off on imposing new tariffs immediately, he announced plans for 25% tariffs on Canadian and Mexican imports starting February 1 and hinted at the possibility of universal tariffs in the future.
This delay provided some relief to U.S. manufacturers dependent on imports. Shares of 3M surged after the materials maker projected growth in both sales and profits for the year.
“President Trump made a lot of comments about tariffs, but none of it has been implemented," said Jay Hatfield, CEO of Infrastructure Capital Advisors.
Some Chinese sectors also saw gains as investors welcomed the absence of immediate tariffs. However, Europe's renewable-energy firms took a hit after Trump paused offshore wind lease developments.
Here’s a snapshot of recent market action:
The S&P 500 and Dow Jones Industrial Average climbed, while the Nasdaq Composite traded near flat.
Apple dropped over 4% after Jefferies downgraded the stock, citing weak iPhone demand.
Treasury yields fell as bonds rallied, with the 10-year yield settling around 4.57%.
Bitcoin remained relatively stable, having surged to a record high above $109,000 on Monday before retreating after Trump’s inaugural speech made no mention of cryptocurrency
The Dow Jones Industrial Average and other major indexes climbed as investors responded to President Donald Trump's remarks on tariffs targeting Mexico and Canada. Early stock market movers included Nvidia (NVDA) and Tesla (TSLA), while Apple (AAPL) faced a sharp decline following multiple analyst downgrades.
Shortly after the opening bell, the Dow Jones Industrial Average advanced 0.7%, the S&P 500 increased by 0.6%, and the tech-focused Nasdaq Composite edged up 0.3% in morning trading.
The 10-year Treasury yield fell to 4.56% early Tuesday, while oil prices dropped over 3%, with West Texas Intermediate futures hovering around $75.50 per barrel.
Among exchange-traded funds, the Invesco QQQ Trust (QQQ) gained 0.3%, and the SPDR S&P 500 ETF (SPY) rose 0.6% following the market open.
Nvidia advanced another 1.6% on Tuesday morning, aiming to build on Friday's 3.1% rally. The stock is looking to reclaim its 50-day moving average, a crucial technical level to monitor.
Electric-vehicle giant Tesla raced more than 2% higher Friday. Shares appear to be finding support around their 10-week line, and they may be forming a new base. Tesla stock reversed from early gains to slide 3% in morning action Tuesday.
Stock Market Today: Trump Tariffs Loom; Netflix Earnings Next
On Monday night, Trump commented that he was thinking about imposing 25% tariff hikes on Canada and Mexico on Feb. 1. His omission of China may relate to TikTok's uncertain status, after a law took effect on Jan. 19 banning the app unless it had been sold by China-based ByteDance.
In stocks, 3M (MMM), Charles Schwab (SCHW) and D.R. Horton (DHI) were key earnings movers Tuesday morning.
Shares of 3M rallied 3.5% in morning trading, moving well above a 141.34 flat-base entry. Brokerage Charles Schwab jumped 3.5%. And homebuilder D.R. Horton surged 3.7% in early morning action.
After the market close Tuesday, Netflix (NFLX) is anticipated to report its fourth-quarter earnings report. Netflix stock closed Friday below its 50-day line, a key level to watch.
Dow Jones Rallies
Markets were closed on Monday in observance of the Martin Luther King holiday. On Friday, the Dow Jones Industrial Average rose 0.8%, the S&P 500 increased by 1%, and the Nasdaq gained 1.5%. Following last week's positive performance, it's a good time to check IBD's The Big Picture for an update on the current market exposure level.
Among the top companies to watch right now are Broadcom (AVGO), Howmet Aerospace (HWM), Meta Platforms (META), and Spotify (SPOT).
In addition to Apple and Nvidia, other notable Dow Jones components making moves include Amazon.com (AMZN), Microsoft (MSFT), and Walmart (WMT).
Meta and Walmart are featured in the Stocks Near A Buy Zone column.
Check out IBD MarketSurge’s “Breaking Out Today” list for top growth stocks moving above valid buy points. For potential breakouts, visit the “Near Pivot” list. For more stock ideas, explore IBD Stock Lists such as IBD 50, Big Cap 20, and Stocks Near A Buy Zone.
Despite some challenges, Palantir has secured a spot among the 25 “Perfect” Stocks.
Dow Jones: Walmart Eyes Buy Point
Retail giant Walmart is forming a flat base with a potential buy point at 96.18, according to MarketSurge pattern recognition. However, the stock must first find support at the 50-day moving average. Shares gained 0.5% on Tuesday.
Outside the Dow, chip giant Broadcom rallied 3.5% on Friday, approaching a 251.88 buy point in a flat base, and was up 1% on Tuesday.
Howmet Aerospace is breaking out and is in buy range above a 120.71 buy point in a flat base. The stock gained 2.2% on Tuesday.
Social media platform Meta is nearing a 638.40 buy point, with shares finding support around their 50-day line. Meta rose 1% in Tuesday's trading.
Spotify is approaching a 506.47 buy point in a flat base following last week's strong performance. The stock earned the RS Line Blue Dot from IBD, indicating it as a market leader. Shares climbed 2.4% on Tuesday morning.
Dow Jones Leaders: Amazon, Apple, Microsoft
Besides Nvidia, another Dow Jones component in the Magnificent Seven is Amazon stock, which rallied 2.4% Friday to move closer to a 233 buy point in a flat base. That's a new buying opportunity for the e-commerce giant. It added 1.9% Tuesday.
Shares of Apple bounced 0.8% Friday, still at their lowest level since mid-November. This week, they tumbled decisively below their 10-week line, a key sign of weakness. But they sold off 4% early Tuesday after Jefferies downgraded the stock from hold to underperform and Loop Capital downgraded shares from buy to hold.
Microsoft shares inched lower Tuesday morning, as they look to add to their bullish move above their 50-day line.
Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on growth stocks, the Dow Jones Industrial Average and the stock market today.
0 Comments