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Stocks rose and bond yields fell on Tuesday as traders watched developments in trade policy.
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Investors were relieved by Donald Trump’s softer approach to tariffs on his first day in office.
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The president also pushed his pro-business and deregulatory agenda.
US stocks rose on Tuesday after Donald Trump’s first-day political actions allayed market fears of an abrupt implementation of tariffs that would disrupt the bullish rally.
Trump said he was considering imposing 25% tariffs on Mexico and Canada starting Feb. 1, but his executive order on the matter stopped short of imposing new tariffs on imports. Instead, the president issued a broad order directing the federal government to examine the impact of what he says are unfair trade and currency practices.
The market widely viewed the order as a less drastic first-day move on the issue of foreign trade, on which Trump campaigned heavily before the election.
The president has promised to implement major tariffs on all American trade, threatening particularly high tariff rates for China, Mexico and Canada. But since taking office on Monday, Trump’s initial moves suggest a softer approach than expected.
“Trump’s comments on China were noticeably less hawkish than during the presidential campaign or even his most recent comments since the election,” Goldman Sachs wrote on Tuesday. “And while we view a ‘universal tariff’ as a clear risk, your comments suggest that, for now, it is a lower priority than we would have hoped.”
Bond yields and the dollar fell on the news. The 10-year Treasury yield was down two basis points to 4.584% Tuesday morning. The dollar index, which measures the U.S. currency against a basket of rivals, was down about 0.9% at $108.39.
Stocks were further boosted by signs that Trump’s presidency would be marked by a pro-business and deregulatory agenda, signaling to investors that the Trump trade is still alive. in your first dayThe president declared a national energy emergency to promote fossil fuel production in the United States and established a regulatory freeze.
Here’s where the US indices stood at the 9:30 a.m. opening bell on Monday:
Here’s what else is happening: