US stocks closed higher Tuesday after the first full day of Donald Trump’s second presidency, with traders absorbing a blizzard of executive orders that pointed to less aggressive action on trade. The Dow gained 1.2%, while the S&P 500 rose 0.9% and the Nasdaq Composite moved higher by 0.6%. President Trump signed an Oval Office ceremony where he announced tariffs on Mexico and Canada, but not China, which is one of the US’ biggest trade partners.
Analysts at various firms, including Goldman Sachs, Morgan Stanley, and UBS, offered mixed views on the market’s response to Trump’s executive orders. Some, like Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, expressed optimism about the economy despite tariff risks. Others, such as Cox, managing partner at Harris Financial Group, noted that the market seemed to have overcome its “tariff tantrum.”
The dollar edged lower after rising on news of Trump’s proposed tariffs, while WTI crude oil fell 1.7% due to executive orders focused on reversing regulations and enabling drilling in the US. The yield on the 10-year Treasury note fell, boding well for stocks.
Investors also rallied on news that OpenAI CEO Sam Altman is set to appear at the White House with tech CEOs to announce an enormous private sector investment in artificial intelligence infrastructure in the US. Oracle surged about 7% after it was announced as a partner in this investment.
The market has already adjusted to expectations of a business-friendly Trump administration, said Clark Geranen, chief market strategist at CalBay Investments. However, January will be crucial for getting a sense of how the year might look for markets. The sentiment driving the market Tuesday was easing fear, and the VIX fell 6%.
Source: https://edition.cnn.com/2025/01/21/investing/us-stocks-trump-presidency/index.html