Wall Street advances on hopes for selective Trump tariffs

By Sruthi Shankar, Johann M Cherian and Carolina Mandl

(Reuters) -Wall Street's main indexes rose on Monday to more than one-week highs, boosted by a rally in semiconductor stocks and a report that suggested the incoming Trump administration could adopt a less aggressive tariff stance than expected.

At 1:55 p.m. EST (1855 GMT), the Dow Jones Industrial Average rose 67.29 points, or 0.16%, to 42,799.42, the S&P 500 gained 41.70 points, or 0.70%, to 5,984.17 and the Nasdaq Composite gained 243.81 points, or 1.24%, to 19,865.49.

Automakers rose, with Ford (NYSE:F ) up 1.6% and General Motors (NYSE:GM ) gaining 3.37%, after a newspaper report said President-elect Donald Trump's incoming administration is focused on imposing tariffs on every country, but only certain sectors deemed critical to national or economic security. Trump later refuted the report.

"He did come out and say that he's not going to water down his tariff plan, but the seed has been planted that the Trump administration's tariff policies won't be quite as shocking as people originally feared," said Brian Jacobsen, chief economist at Annex Wealth Management.

Automobile manufacturers are considered the most vulnerable to tariffs imposed on U.S. trade partners, given their vast supply chains.

Leading up to Trump's Jan. 20 inauguration, investors are seeking insights into his policies, which are broadly seen as beneficial for corporate America as well as the U.S. economy.

The Russell 2000 index, which tracks domestically focused small-cap companies, rose 0.78%.

Eight of 11 S&P 500 sectors advanced, with communication services stocks leading gains, climbing 1.73%.

Chipmakers got a boost from Microsoft (NASDAQ:MSFT )'s plan to invest $80 billion to develop artificial-intelligence-enabled data centers, as well as Foxconn (SS:601138 )'s forecast-beating fourth-quarter revenue.

Nvidia (NASDAQ:NVDA ) gained 4.54%, Advanced Micro Devices (NASDAQ:AMD ) added 3.77% and Micron Technology (NASDAQ:MU ) soared 12.15%. The Philadelphia SE Semiconductor index jumped 3.45% to hit a two-month high.

U.S. stocks had rebounded sharply on Friday after a string of losses in December and the first few sessions of January, when concerns about high valuations, rising Treasury yields and thin liquidity saw traders pull back after a strong 2024 run.

In a week packed with economic data and speeches from U.S. Federal Reserve officials, investors will look for clues on the pace of monetary policy easing this year. Later in the week, the focus will be on a monthly payrolls report.

While Trump's proposals could boost corporate profits and energize the economy, they also risk driving up inflation. Fed Governor Lisa Cook was the latest among a number of policymakers to caution that inflation risks remain in the new year.

Citigroup (NYSE:C ) added 3.15% after a bullish rating from Barclays (LON:BARC ). An index tracking banks rose 0.88%. Fed Vice Chair for Supervision Michael Barr, who has sought a range of strict rules on the nation's biggest banks, said he will resign.

Markets will be shut on Thursday for a national day of mourning to mark the death of former President Jimmy Carter.



Advancing issues outnumbered decliners by a 1.47-to-1 ratio on the NYSE and by a 1.53-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and six new lows while the Nasdaq Composite recorded 88 new highs and 27 new lows.

Source: Investing.com