US stocks rallied on Tuesday as President Donald Trump held off on announcing new tariffs on his first day back in office. The Dow Jones Industrial Average rose more than 500 points, or 1.2%, while the S&P 500 gained 0.9% and the Nasdaq Composite moved up 0.6%. During an Oval Office signing ceremony, Trump said his administration would impose a 25% tariff on imports from Mexico and Canada starting February 1.
However, he did not mention any immediate tariffs on China, one of the US’s biggest trade partners. “President Trump’s Inauguration Day policy announcements on tariffs were more benign than expected,” said Alec Phillips, chief US political economist at Goldman Sachs, in a note on Tuesday. Analysts at Morgan Stanley cautioned that “vigilance is warranted” as markets try to keep track of Trump’s numerous policy decisions.
Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, noted that despite the risks posed by tariffs and other fiscal policies, resilient US economic activity could benefit stock markets in 2025.
Us markets rally on tariff delay
Investors were also buoyed by news that OpenAI CEO Sam Altman is set to meet with President Trump and other tech CEOs to announce a significant private sector investment in AI infrastructure in the US.
Oracle surged about 7% on the news that it would partner with OpenAI and Softbank for the investment. Meanwhile, Apple stock fell more than 3% after a downgrade from analysts, and Netflix reported fourth-quarter earnings that exceeded expectations after the market close. Bitcoin was trading around $106,000 on Tuesday afternoon, slightly lower from its record high the previous day.
Acting SEC Chairman Mark Uyeda announced the formation of an SEC “crypto task force” focused on reviewing the regulation of cryptocurrencies. Trump did not mention bitcoin during his inaugural address or issue any executive actions related to cryptocurrencies. The market actions indicate a keen focus on President Trump’s policies and their potential impact on both domestic and global economic activities.
Investors are eager for clarity on how the administration will address campaign promises related to trade and energy, with significant implications for the stock market’s future direction.
