Stocks soared on Tuesday, with the Dow, S&P 500, and Nasdaq all posting solid gains as President Donald Trump took initial actions in his new administration and bond yields retreated.
The Dow Jones Industrial Average gained 1.2%, while the S&P 500 climbed 0.9%. Both indices had already seen their best weekly performance in over two months last week. The Nasdaq Composite, known for its tech-heavy composition, added 0.6% to its value.
Markets responded positively as Trump refrained from immediately implementing any drastic tariff measures, which could have hurt both stocks and bonds. The prospect of tariffs on foreign goods has long been a source of concern for investors, as these charges could lead to higher prices for U.S. consumers.
While Trump mentioned the possibility of imposing 25% tariffs on imports from Canada and Mexico starting February 1, he did not sign any executive orders to enforce these tariffs, easing investor fears for now.
Bond yields also declined on Tuesday. The yield on the 10-year Treasury note dropped by 0.037 percentage points, settling at 4.573%. Lower yields are beneficial for current bondholders, who see an increase in the value of their existing bonds.
As the day drew to a close, stocks related to artificial intelligence (AI) also saw significant movement. The White House unveiled plans to invest up to $500 billion in U.S. AI infrastructure through a joint venture. This announcement helped push the Global X Artificial Intelligence & Technology ETF to $40.08, just shy of its all-time closing high of $40.57.
Overall, it was a strong day for markets, driven by optimism around Trump’s cautious approach to tariffs and the potential for growth in the AI sector.
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