Wall Street ended higher on Tuesday, with tech stocks rebounding, as investors digested President-elect Donald Trump’s tariff threats to key trade partners and minutes of the Federal Reserve’s latest meeting. All three major indexes ended in positive territory, with the Dow and S&P 500 closing at new record highs.
The Dow Jones Industrial Average (DJI) gained 0.3% or 123.74 points, to end at 44,860.31 points, rebounding after shedding more than 300 points at session lows to close at a new record high.
The S&P 500 jumped 0.6% or 34.26 points, to finish at 6,021.63 points. Utilities and tech stocks were the biggest gainers.
The Utilities Select Sector SPDR (XLU) rose 1.6%. The Technology Select Sector SPDR (XLK) gained 0.5%, while the Consumer Discretionary Select Sector SPDR (XLY) added 0.4%. Nine of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 0.6% or 120.74 points to close at 19,175.58 points.
The fear-gauge CBOE Volatility Index (VIX) was down 3.42% to 14.10. Decliners outnumbered advancers on the NYSE by a 1.57-to-1 ratio.
Stocks pulled back from Monday’s highs after markets opened following comments from Trump. The President-elect on Monday night called for a 25% tariff on imports from partner nations Canada and Mexico. He also called for an additional 10% levy on Chinese goods.
Trump has already declared that he would impose up to 20% tax on all imports from China. Mexican President Claudia Sheinbaum also hinted at retaliatory tariffs on Tuesday. This initially raised some concerns, which saw stocks taking a hit in the opening hours of Tuesday’s trading.
Shares of automakers General Motors Company (GM) and Ford Motor Company (F) fell on the news as the companies have integrated supply chains in Mexico and Canada along with the United States. Shares of General Motors and Ford declined 9% and 2.5%, respectively. General Motors carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, investors soon shrugged off the worries and looked at the positive sides under Trump’s regime. Investors are hopeful about the economy performing well without a spike in inflation under the guidance of Trump’s Treasury Secretary pick Scott Bessent.
This saw stocks reversing course, with tech stocks rebounding after taking a beating in the last few sessions. Shares of Meta Platforms, Inc. (META) rose 1.5%, while Amazon.com, Inc. (AMZN) jumped 3.2%.
