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Stocks Rally on Tariff Delay in Market Mesmerized by Trump – Yahoo Finance

(Bloomberg) — One business day into President Donald Trump's second term, it's clear there is new momentum in the stock market, at least for now. Stocks rallied on Tuesday, but the main gains came from the one thing the president didn't do: enact sweeping tariffs on major trading partners.

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The unexpected lack of action (President Trump had long promised to tax Chinese goods by up to 60% and Mexican and Canadian goods by nearly half that on day one) sent US Treasury yields lower and the S&P 500 index at 0.9. % rose. The small-cap Russell 2000 index rose 1.9% as a risk-on atmosphere attracted traders.

The tariff moratorium appears to last at least another week, but as traders noted on Monday, market-moving remarks from President Trump could come at any time. After taking office, the new president issued a slew of executive orders, swaying companies in fields as diverse as electric cars, private prison operators, and space exploration. Big tech stocks were shocked mid-session after White House officials teased pending announcements on AI spending.

Taken together, this event shows that President Trump intends to play a visible role in American business and finance, with an almost unique ability to sway markets based on bizarre comments and social media posts. It reminded me clearly. Measures of stock market volatility were subdued on Tuesday, but traders mainly expect President Trump's leadership style to result in frequent disruptions to keep up with policy pronouncements.

Steve Sosnick, chief strategist at Interactive Brokers, said every president “impacts the stock market, and what we learned from his first term is that President Trump has more influence than any other president. I think it means we have,'' he said, adding that Trump sees markets as having “more clarity” as having influence over them. An important indicator of how he's doing. “During his previous term, we as market participants became very accustomed to a wide range of comments, if not policy announcements, that could be made at any time on specific topics.”

Investors are closely monitoring further moves by the administration and assessing how they will impact the market. JPMorgan Chase & Co. has established a “war room” for just this purpose. It is not yet clear how the policy proposals will be developed. For example, the stock prices of companies facing tariff risk have largely avoided that threat so far.

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