Investing.com - The S&P 500 closed higher Tuesday, as expectations for President Donald Trump's policies to accelerate economic growth stoked bullish bets on stocks.
At 4:00 p.m. ET (21:00 GMT), the benchmark S&P 500 rose 0.9%, the tech-heavy Nasdaq Composite gained 0.6%, and the 30-stock Dow Jones Industrial Average added 1.2%, or 538 points.
Trump takes office, announces slew of executive actions on day one; threatens tariffs on Mexico and Canada
Trump said he was mulling imposing a 25% tariffs on Canada and Mexico from Feb. 1, citing concerns about their borders policies. The president, who officially took office on Monday, signed a slew of executive orders -- written directives issued to the federal government that are legally binding and do not require approval from Congress -- covering a wide sweep of issues, including immigration and border security.
On trade, Trump did not move to immediately slap harsh tariffs on both friends and adversaries, saying he is "not ready for that yet". But he directed federal agencies to look into persistent US trade deficits and perceived unfairness in trade practices by other countries.
In a memo, the Commerce and Treasury departments and the US Trade Representative were ordered by Trump to also investigate the "economic and national security implications and risks" resulting from trade deficits and recommend "appropriate" responses, "such as a global supplemental tariff or other policies" to remedy the matter.
Elsewhere, Trump announced a host of immigration-related executive orders, particularly one that would end the long-standing practice of granting automatic birthright citizenship. This decision, which is due to take effect in 30 days, is expected to face legal challenges.
Trump also signed orders taking the US out of the Paris Climate Accord and the World Health Organization, as well as another seeking to delay by 75 days a ban on TikTok. The popular short-form video platform was initially due to be shut down in the US on January 19.
Other orders pertained to moves to end diversity, equity and inclusion programs in the federal government, and created a so-called Department of Government Efficiency that will be led by Tesla (NASDAQ:TSLA) CEO Elon Musk.
In a note to clients, analysts at Capital Economics said they expect a "fair degree of volatility" to persist in financial markets "for a while yet", although they predict that Trump's first year in office will ultimately coincide with a rally in both stocks and the US dollar.
Corporate earnings in focus
Scotch tape-maker 3M Co. (NYSE:MMM) posted fourth-quarter results that exceeded analyst expectations, while its 2025 earnings outlook was largely in line with consensus estimates. Its shares rose more than 4%.
Charles Schwab (NYSE:SCHW) shares spiked nearly 6% after the financial services company unveiled adjusted fourth-quarter earnings per share that beat average analyst estimates.
The reports will likely be closely monitored by traders trying to gauge the outlook for markets after a somewhat uneven start to 2025. Some analysts have suggested that earnings could be a driver of equity returns this year, especially as robust economic data and uncertainty around Trump's trade policies cloud the path ahead for potential Federal Reserve interest rate cuts.
Last week, several major US banks, often seen as possible bellwethers for the wider business environment, announced strong results powered in part by revived dealmaking activity.
Bitcoin shines as Trump's SEC to launch crypto task force to bring regulatory clarity
Bitcoin (BitfinexUSD) jumped 2% as the Security and Exchange Commission said its acting Chair Mark Uyeda launched a “crypto task” force to bring regulatory clarity to the industry. The SEC's move to "developing a comprehensive and clear regulatory framework for crypto assets," added to expectations that the Trump administration will likely seek to lower the regulatory burden for cryptocurrency.
Trump has previously pledged to make the United States the crypto capital of the world.
(Scott Kanowsky, Ayushman Ojha contributed reporting.)