Dow, S&P 500, Nasdaq rise with investors on Trump tariff watch

U.S. stocks rose on Tuesday as investors assessed President Donald Trump’s wave of first-day orders and the prospect that historic tariffs will be imposed on Mexico and Canada within weeks.

The Dow Jones Industrial Average (^DJI) and the benchmark S&P 500 (^GSPC) both rose by approx. 0.5% and 0.4%. The Nasdaq Composite ( ^IXIC ) also rose about 0.5% as Nvidia ( NVDA ) and other tech megacaps boosted the overall index.

Wall Street is bracing for likely market volatility on the first trading day of Trump’s second term as the new president charges ahead with his energy and trade-focused policy agenda. US markets were closed on Monday for the Martin Luther King Jr. holiday.

Markets got a dose of relief as Trump held off on firing the flurry of universal tariff hikes many expected on his first day in office. China got a surprise reprieve when Trump failed to act on promised high tariffs on its imports. U.S. stock futures rose and the dollar ( DX-Y.NYB ) retreated from a near two-year high in the aftermath.

But the mood changed after Trump said on Monday night that he was considering imposing 25% tariffs on Mexico and Canada from February 1. And Chinese shares (000300.SS) closed Tuesday with only small gains, suggesting investors are not convinced that a US-China reset coming to avert a trade war.

Meanwhile, the 10-year Treasury yield ( ^TNX ) fell about 5 basis points to about 4.56% early Tuesday, recovering somewhat from a deeper decline in Asian trade amid the initial reaction.

Bitcoin (BTC-USD) has been on a roll, rising to a record high above $109,000 on Monday as Trump was sworn in and the new president issued an official TRUMP “memecoin” token. The leading digital currency then fell sharply early Tuesday after a hoped-for pro-crypto push failed to show up in the first policy actions. It has since recovered somewhat to trade slightly higher at over $104,000.

The next batch of quarterly earnings will provide other food for thought for investors. Netflix ( NFLX ) is expected to deliver strong results when it reports after-hours.

Meanwhile, earnings at Charles Schwab ( SCHW ) surged nearly 50% as trading activity rose by double digits. DR Horton ( DHI ) also beat expectations despite a soft housing market, while 3M Company ( MMM ) issued upbeat full-year expectations, driven by organic sales growth.

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