S&P 500, Nasdaq climb; markets analyze Trump's tariff threats, Fed minutes

By Saeed Azhar, Johann M Cherian and Purvi Agarwal

(Reuters) -The benchmark S&P 500 and the Nasdaq extended recent gains on Tuesday, as technology stocks rebounded, while investors digested President-elect Donald Trump's tariff pledges on top trade partners and the latest minutes from the Federal Reserve.

U.S. short-term interest-rate futures pared earlier losses after the Fed's latest minutes showed officials appeared divided over how much further they may need to cut interest rates.

The minutes of the Nov. 6-7 meeting also showed the group agreed this was a moment to avoid giving much concrete guidance about how U.S. monetary policy is likely to evolve in the weeks ahead.

Trump said he would impose a 25% conditional tariff on Canadian and Mexican imports that could violate a free-trade deal he negotiated during his previous term. He also outlined "an additional 10% tariff, above any additional tariffs" on imports from China, raising the risk of trade wars.

Automakers Ford (NYSE:F ) and General Motors (NYSE:GM ) - which have highly integrated supply chains across Mexico, the U.S. and Canada - lost 2.2% and 8.3%, respectively.

"The concern is that some products are going to become more costly and that will mean revenue for those companies that are possibly manufacturing those goods overseas is going to decline," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

"It's a lot of back-and-forth right now because investors are trying to position themselves for January and the days after and they're not really sure."

At 2:11 p.m. EST the Dow Jones Industrial Average fell 15.74 points, or 0.04%, to 44,720.83, the S&P 500 gained 24.38 points, or 0.41%, to 6,011.75 and the Nasdaq Composite gained 96.90 points, or 0.51%, to 19,152.47.

Gains in megacaps such as Microsoft (NASDAQ:MSFT ) and Apple (NASDAQ:AAPL ) boosted the information technology sector and the tech-heavy Nasdaq.

"Markets have become desensitized to tariffs as most believe the rhetoric to be more aggressive than the eventual tariffs themselves," said Jamie Cox, managing partner at Harris Financial Group

"It also doesn't hurt that the economy is showing up stronger lately, which helps to offset the fiscal drag of tariffs in the short run."

Well Fargo stood out among sluggish banking stocks, gaining almost 1.3% after Reuters reported, citing sources, that the bank is in the last stages of a process to pass regulatory tests to lift a $1.95 trillion asset cap next year after fixing problems from its scandal over fake accounts.

The blue-chip Dow was weighed down by declines in Amgen (NASDAQ:AMGN ), which slid 7.6% after its experimental obesity drug fell short of expectations.

The S&P 500 touched a record high on Monday and logged its sixth-straight session of gains, while the Russell 2000 also scaled an all-time high after three years. On the day, the small-cap index fell 0.6%.

Among others, Eli Lilly (NYSE:LLY ) rose 5.1% after U.S. President Joe Biden was set to propose expanding Medicare and Medicaid coverage for anti-obesity drugs.

Best Buy (NYSE:BBY ) lost 5.7% and was among top decliners on the S&P 500 after trimming its annual profit and sales forecasts.



Declining issues outnumbered advancers by a 1.88-to-1 ratio on the NYSE. There were 231 new highs and 39 new lows on the NYSE.

The S&P 500 posted 45 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 104 new highs and 85 new lows.

Source: Investing.com