Stocks get AI boost as Trump holds fire on tariffs
Stocks climbed as President Donald Trump struck a better-than-feared tone on global trade and speculation grew that his policies will further boost Corporate America. Bonds continued to unwind the recent surge in yields that roiled markets. The dollar wavered.
Over 400 shares in the S&P 500 rose, with the gauge up almost 1% as Trump is expected to announce a new investment push for artificial intelligence led by Softbank Group Corp., OpenAI LLC, and Oracle Corp. A closely watched exchange-traded fund tracking companies with AI exposure hit a three-year high. Small caps climbed on bets they will benefit from a protectionist stance. Trump’s flurry of executive orders helped boost space shares, while weighing on electric-vehicle makers. An ETF focused on big Chinese firms gained as the US president so far refrained from announcing tariffs on the Asian nation.
Treasury yields hovered near their lowest levels of the year. Mexico’s peso and Canada’s loonie got hit as Trump outlined levies he expects to place on both countries by Feb. 1.
“Risky assets should benefit from deregulation and tariffs emerging as not so bad as feared,” said Mohit Kumar at Jefferies International Ltd. “For rates, less onerous tariffs and likely lower oil prices should be a positive.”
Callie Cox at Ritholtz Wealth Management, says it’s time to see what speculation was “founded” and what was “just nonsense” when it comes to tariffs. Meantime, she noted that Trump faces a crucial test on another front.
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