Overview
On Tuesday, U.S. stocks closed higher, led by gains in the S&P 500 and Nasdaq Composite, as technology stocks rebounded sharply. The Dow Jones Industrial Average also advanced, though at a slower pace, as investors digested President-elect Donald Trump’s tariff threats and the latest Federal Reserve minutes. The Fed’s November meeting minutes revealed a divided stance on future rate cuts, signaling that monetary policy decisions in December and beyond would hinge on key economic data.
The S&P 500 climbed 0.57% to its sixth straight session of gains, touching another record high, while the Nasdaq rose 0.63%, fueled by strong performances from megacap tech stocks like Microsoft and Apple, which gained over 2%. Meanwhile, the Dow advanced 0.28%, bolstered by gains in Wells Fargo after reports that the bank is close to passing regulatory hurdles related to its asset cap. However, losses in Amgen weighed on the index, as its experimental obesity drug underperformed expectations.
Trade tensions resurfaced after Trump proposed a 25% conditional tariff on Canadian and Mexican imports and additional levies on Chinese goods, raising fears of renewed trade wars. Automakers Ford and General Motors dropped significantly, with GM falling nearly 9% as investors weighed the implications of costlier supply chains.
- Dow Jones Industrial Average: Rose 0.28% to 44,860.31
- S&P 500: Gained 0.57% to 6,021.63
- Nasdaq Composite: Increased 0.63% to 19,174.30
Fear & Greed Index
Neutral – Gains in technology stocks and strong earnings tempered concerns over geopolitical risks and trade policy uncertainty.
Sector Performance
- Winners:
- Information Technology: The sector climbed 1.2%, driven by strength in Microsoft and Apple.
- Consumer Staples: Eli Lilly rose 4.6% following Biden’s proposed expansion of Medicare and Medicaid coverage for anti-obesity drugs.
- Losers:
- Industrials: Automakers like GM and Ford faced steep declines due to Trump’s tariff proposals, with GM falling nearly 9%.
- Healthcare: Amgen slid 4.8% after its experimental obesity drug underperformed expectations.
Key Movers
- Microsoft (MSFT): Gained over 2%, boosting the tech-heavy Nasdaq.
- Amgen (AMGN): Dropped 4.8%, dragging down the Dow, after disappointing results from its obesity drug trial.
- Wells Fargo (WFC): Rose 0.6%, standing out in the financial sector on optimism over regulatory progress.
- General Motors (GM): Declined nearly 9%, reflecting investor concerns over Trump’s tariff threats.
Economic Data
- Federal Reserve Minutes: Showed division among officials about future rate cuts, with the consensus leaning on upcoming employment and inflation data.
- Tariff Announcements: Trump’s trade policies sparked fresh concerns over costlier supply chains, impacting industrial stocks.
Outlook
Investors are closely watching for economic data releases in the coming weeks, particularly employment and inflation reports, which are expected to influence the Federal Reserve’s December policy decisions. The Fed’s meeting minutes hinted at another potential rate cut, but officials emphasized a data-driven approach moving forward.
While optimism in technology stocks and healthcare remains, the outlook for industrials and automakers is clouded by renewed trade tensions. Sectors tied to international supply chains may face continued pressure as Trump’s tariff plans take shape. Markets are likely to experience volatility in the near term as geopolitical risks, trade policies, and macroeconomic data drive sentiment. Defensive sectors and megacap tech stocks could provide stability amid broader uncertainties.