Dow rallies 400 points as investors feel Trump’s tone on tariffs is softer than feared: Live updates

The Dow Jones Industrial Average advanced on Tuesday as Wall Street viewed President Trump’s comments and first-day actions around international trade as a bit softer than initially believed.

The 30-stock Dow added 449 points, or 1%. The S&P 500 gained 0.8%, while the Nasdaq Composite rose 0.6%.

3M climbed more than 4% after earnings came in better than analysts expected. Small-cap stocks also participated in Tuesday’s rally, with the Russell 2000 rising more than 1.5%.

Several big technology stocks also took a leg up, with Amazon and Alphabet each gaining more than 2%. But a drop of more than 4% in Apple on the back of two Wall Street downgrades weighed on the tech-heavy Nasdaq.

Trump said he was considering 25% tariffs on Mexico and Canada on Feb. 1 because of their border policies while signing first-day executive orders in the White House Monday night. He also mentioned China, noting that the U.S. could put tariffs on the country if it doesn’t approve a TikTok deal.

Ultimately, Trump issued a broad memorandum directing federal agencies to study what he deems as unfair trade policies with foreign countries. But the president stopped short of authorizing new levies on his first day back in the Oval Office, which investors took as a sign that he may be less ardent about issuing tariffs than previously expected.

“President Trump’s Inauguration Day policy announcements on tariffs were more benign than expected,” said Alex Phillips, chief U.S. political economist at Goldman Sachs, in a note to clients. “For now, it is a lower priority than we would have expected.”

To be sure, Phillips said Trump’s language around Canada and Mexico was actually more hawkish than he anticipated. Still, the economist said he was lowering the odds that the U.S. slaps a universal tariff on all imports this year, which can offer confidence to traders originally cautious that a wide-reaching policy would reignite inflation.

Trump said he wasn’t ready for universal tariffs yet and he was vague when discussing levies on China.

Outside of trade policy, Wall Street is focused on Trump following through on the pro-business proclamations he made throughout his campaign, most notably his calls for looser regulations that helped lift banking banking stocks following his election win in November. Other components of the so-called Trump trade — including small caps, oil stocks and bitcoin — will likely be hypersensitive to what his administration does.

In his inaugural address, the president labeled his return to the White House as the beginning of a period of growth and success for the country, while largely condemning the Biden Administration. Trump also on Monday declared a national energy emergency to increase fossil fuel production.