S&P 500, Nasdaq hold gains as markets mull Trump's tariffs
US equity indexes mixed: Nasdaq up ~0.4%
Cons Discr leads S&P gainers; materials largest decliner
STOXX 600 down 0.6%
US dollar, bitcoin down; crude oil up ~0.8%; gold flat
US Treasury 10-year yield up at 4.319%
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S&P 500, NASDAQ HOLD GAINS AS MARKETS MULL TRUMP'S TARIFFS
The S&P 500 and the Nasdaq are posting gains on Tuesday, with market participants digesting the implications of President-elect Donald Trump's tariff threats on Mexico and Canada. The Dow, however, is down on the day, after rising 1% in the previous session, and hitting yet another fresh record closing high.
Trump said late on Monday he would sign an executive order imposing a 25% tariff on all products coming into the United States from Mexico and Canada. The tariffs would remain in place, he said, until the two countries clamp down on drugs, particularly fentanyl, and migrants crossing the border illegally.
His statement reverberated across global financial markets. European stocks fell and Asian equities were on the defensive as well. Treasury prices are currently lower, while the dollar fell.
The optimism seen after the nomination of hedge fund manager Scott Bessent, a moderate when it comes to tariffs, as U.S. Treasury Secretary, was put on the back burner, with Trump's latest missive.
"One has to wonder what Bessent is thinking at this moment since he must certainly be aware that unilateral tariffs on Mexico and Canada would violate the United States-Mexico-Canada Agreement, the Trump-negotiated replacement to NAFTA during his first term in office. Go figure," writes Canada-based Dave Rosenberg, founder and CEO of Rosenberg Research, in a note to clients.
He also adds that Mexico and Canada are the only countries in the world that ship out more than 20% of their GDP to the United States: 27% for Mexico and 21% for Canada. No other country comes close to this extreme exposure to the Trump tariffs, Rosenberg says.
Meanwhile, U.S. data on housing and consumer confidence shows mixed results. U.S. stocks showed little reaction to the reports, with tariffs the main focus.
House prices jumped 0.7% on a month-on-month basis after an upwardly revised 0.4% rise in August. Prices were initially reported to have gained 0.3% in August.
October new home sales, however, fell 17% month-on-month, while U.S. consumer confidence was steady at 111.7.
Market participants are also looking to the Federal Reserve minutes later on Tuesday. Fed officials are likely to say that they will keep reducing interest rates for now, and investors still expect them to do so at the Dec. 17-18 policy meeting.
Here is a snapshot of financial markets:
(Gertrude Chavez-Dreyfuss)
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FOR TUESDAY'S OTHER LIVE MARKETS POSTS:
AN IMPLIED FLOOR AT 4% FOR US 10-YEAR YIELDS? - CLICK HERE
GERMAN ELECTION A "POSITIVE CATALYST" FOR UTILITIES - CLICK HERE
UBS BULLISH ON BIG TECH+ FOR 2025 - CLICK HERE
WALL STREET LONG POSITIONS "VULNERABLE" TO SENTIMENT SHIFT - CLICK HERE
WHY US TREASURY YIELDS MAY DROP DESPITE TRUMP - CLICK HERE
TRADE JITTERS HIT EUROPE, AUTOS DOWN - CLICK HERE
EUROPE BEFORE THE BELL: TRUMP TARIFF JITTERS WEIGH - CLICK HERE
TRUMP'S TARIFF POST SENDS MARKETS SCRAMBLING - CLICK HERE
US early market snapshot https://tmsnrt.rs/3Z4ZMeI
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