U.S. stock markets opened higher on Tuesday, extending the gains seen last session, after President Donald Trump announced a series of executive orders as investors awaited a series of important corporate sector results this week.
Sentiment wavered in markets globally following Trump’s inauguration on Monday, as initial relief that his executive orders would not include trade tariffs from day one came to a halt when he mentioned to reporters that he was looking into imposing a 25% tariff on both Canada and Mexico starting February 1.
During the early going the benchmark S&P 500 index had gained 27 points about 0.5%, the tech-heavy Nasdaq Composite 83 points or $0.4, and the 30-stock Dow Jones had gained 151 points or 0.4%.
Wall Street’s major averages were closed Monday in observance of the Martin Luther King Jr. Day holiday. On Friday of the previous week, the S&P 500 had advanced 1% to 5,996.66 points, the Dow Jones Industrial Average gained 0.8% to 43,487.83, and the Nasdaq Composite jumped 1.5% to 19,630.20 points.
Trump takes office, announces series of executive actions on his first day as president
Trump’s executive orders – written directives issued to the federal government that are legally binding and do not require congressional approval – have so far served a wide range of issues.
On trade, Trump has not taken immediate steps to impose harsh tariffs on both his neighbors and friends and adversaries, alluding that he is “not yet ready for it.” Although he directed federal agencies to examine continued U.S. trade deficits and perceived unfair trade practices by other countries.
In a memo, the Commerce and Treasury departments and the U.S. Trade Representative were ordered by Trump to similarly investigate the “economic and national security implications and risks” generated from trade deficits and recommend “appropriate” responses, “such as a supplemental global tariff or other policies” to remedy the issue.
On the other hand, Trump signaled a series of executive orders linked to immigration, especially one that ends the longstanding practice of automatically providing birthright citizenship, This decision, which will take effect in 30 days, is believed to face challenges at the legal level.
Similarly Trump signed orders to withdraw the United States from the Paris Climate Agreement along with the World Health Organization, as well as another to delay the TikTok ban by 75 days. The famous short video platform was originally going to shut down in the United States on January 19.
Other orders referred to measures to finalize diversity, equity and inclusion programs in the federal government, and gave birth to the Department of Government Efficiency, which will be under the direction of Tesla (TSLA) CEO Elon Musk.
In a note to clients, analysts at Capital Economics indicate that they believe a “reasonable degree of volatility” will persist in financial markets “for a while yet,” although they anticipate that Trump’s first year in office will eventually coincide with a rally in both stocks and the U.S. dollar.
Corporate earnings in the spotlight and in the spotlight
This week, investors were on the lookout for the release of quarterly results from several large U.S. companies.
Tuesday’s results include video streaming giant Netflix (NFLX), which will report its results after the markets close.
Before the start of the session, adhesive tape maker 3M Co (MMM) posted fourth-quarter results that beat analysts’ forecasts, while its 2025 earnings outlook remained largely in line with market estimates. The company’s shares rose in early trading.
Charles Schwab (SCHW) shares also rose after the financial services company reported fourth-quarter adjusted gross earnings per share that beat the median of analysts’ estimates.
Traders are likely to keep a close eye on these reports to gauge the outlook for the markets after a somewhat mixed start to 2025. Some analysts have noted that earnings could be a driver of equity returns this year, especially as strong economic data and uncertainty around Trump’s trade policies cloud the path ahead for potential Fed rate cuts.
The previous week, several major U.S. banks, often seen as potential indicators of the overall business climate, posted positive results thanks, in part, to a revival in business activity.
