Trump’s Softer Trade Stance Sparks Market Rally: S&P 500 and Dow Climb

Markets Rally as Trump Takes Softer Stance on Trade

Stocks rose and bond yields fell on Tuesday as investors welcomed President Donald Trump’s more measured approach to trade policy on his first day in office. The S&P 500 climbed 0.51% to 6,027.22, while the Dow Jones Industrial Average gained 0.59%, adding 255.58 points to reach 43,743.41. The Nasdaq composite edged up 0.05% to 19,638.44.

Traders were relieved by Trump’s decision not to immediately impose new tariffs on Mexico and Canada, despite considering duties of up to 25%. Instead, the President issued an executive order for the federal government to examine unfair business practices, a move viewed as less drastic than anticipated.

This softer stance contrasts with Trump’s campaign rhetoric, which promised significant duties on U.S. trade partners, particularly China, Mexico, and Canada. Goldman Sachs analysts noted that Trump’s comments on China were less hawkish than expected, further easing market concerns.

The more moderate approach to trade policy, coupled with Trump’s pro-business and deregulatory agenda, boosted investor confidence. The President has already declared a national energy emergency to promote U.S. fossil fuel production and established a regulatory freeze.

In response to these developments, bond yields and the dollar fell. The 10-year Treasury yield decreased to 4.584%, while the dollar index dropped by about 0.9% to $108.39.

In the commodities market, West Texas Intermediate crude oil fell 2% to $76.40 a barrel, and Brent crude decreased 1.3% to $79.13 a barrel. Gold, often seen as a safe-haven asset, increased to $2,753 an ounce.

The cryptocurrency market also saw movement, with Bitcoin falling 4% to around $102,933. Concerns have been raised about Trump’s meme coin affecting crypto credibility, although major holders of the coin have reportedly seen significant returns.

As markets digest these initial policy moves, analysts are closely watching for further developments in trade negotiations and economic policy. An unnoticed stock move has suggested a bullish signal for 2025, while concerns persist about rising credit card debt among Americans.

Investors are also monitoring potential sanctions on Russian oil as part of Trump’s Ukraine strategy, which could have significant implications for global energy markets.