US stocks hit one-week high after report of selective Trump tariffs
At 9:47 a.m. ET, the Dow Jones Industrial Average rose 174.85 points, or 0.41%, to 42,906.98, the S&P 500 gained 60.89 points, or 1.02%, to 6,003.36 and the Nasdaq Composite gained 300.71 points, or 1.53%, to 19,922.39.
Automakers rose, with Ford up 2.6% and General Motors gaining 2.8% after a report said President-elect Donald Trump’s incoming administration is currently focused on imposing universal tariffs, but only on certain sectors deemed critical to national or economic security. However, Trump later refuted the report.
Automobile manufacturers are considered the most vulnerable to tariffs imposed on trade partners of the U.S., given their vast supply chains.
In the lead-up to Trump’s inauguration on Jan. 20, investors are seeking insights into his policies, which are broadly seen as beneficial for corporate America as well as the U.S. economy.
The Russell 2000 index, tracking domestically focused small-cap companies, rose 0.7%.”The concept of tariffs can either be done with a broad brush, which had been talked about a bit in the campaign trail, or they can be applied more targeted to protect critical industries in the United States. It appears the narrative of the latter seems to be moving forward, and that’s something the market would celebrate,” said Art Hogan, chief market strategist at B. Riley Wealth.Nine out of the 11 S&P 500 sectors advanced with tech stocks leading gains, up 1.6%.
Chipmakers got a boost from Microsoft’s plan to invest $80 billion to develop artificial-intelligence-enabled data centers, as well as Foxconn’s forecast-beating fourth-quarter revenue.
Nvidia gained 3.5%, Advanced Micro Devices added 2.8% and Micron Technology climbed 9.6%. The Philadelphia SE Semiconductor index jumped 3.7% to hit a two-month high.
U.S. stocks rebounded sharply on Friday after a string of losses in December and the first few sessions of the new year, when concerns about high valuations, rising Treasury yields and thin liquidity saw traders pull back after a strong 2024 run.
In a week packed with economic data and speeches from U.S. Federal Reserve officials, investors will look for clues on the pace of monetary policy easing this year. Later in the week, the focus will be on a key monthly payrolls report.
While Trump’s proposals could boost corporate profits and energize the economy, they also run the risk of placing upward pressure on inflation. Fed Governor Lisa Cook was the latest among a number of policymakers to caution that inflation risks remain in the new year.
Among others, Citigroup added 1.6% after a bullish rating from Barclays, while planemaker Boeing rose 1.3% after the brokerage upgraded the stock to “overweight”.
Markets will be shut on Thursday, Jan. 9, on account of a national day of mourning to mark the death of former President Jimmy Carter.
Advancing issues outnumbered decliners by a 2.16-to-1 ratio on the NYSE and by a 2.17-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and two new lows, while the Nasdaq Composite recorded 64 new highs and 11 new lows.
