Markets Surge as Trump Steers Clear of Immediate Tariff Hikes

Wall Street indexes rose as President Trump refrained from imposing blanket tariff increases in his new term. Investors remained cautious about potential trade wars but were relieved by a more nuanced approach. Strong bank earnings and cooling inflation further supported market gains, with 3M and automakers leading the rally.

Wall Street saw a notable upswing on Tuesday as the S&P 500 and Dow reached their highest levels in more than a month. Investors expressed relief that President Trump did not immediately impose universal tariffs at the outset of his second term, a move previously anticipated.

Despite ongoing concerns about possible trade wars and inflationary pressures, Goldman Sachs revised its forecast for the likelihood of a universal tariff this year. The firm lowered its expectations from 40% to 25%, citing the absence of tariff-related executive actions in Trump's initial measures.

Market strategists like Carol Schleif suggest the administration might employ tariffs more strategically. This optimism fueled a rally, with the small-cap Russell 2000 outperforming larger indexes, and many sectors, including utilities and industrials, reporting gains.

(With inputs from agencies.)