NEW YORK (AP) 鈥 U.S. stocks rose to records Tuesday after Donald Trump鈥檚 created only some ripples on Wall Street, even if they could were they to take effect.
The S&P 500 climbed 0.6% to top the it set a couple weeks ago. The Dow Jones Industrial Average added 123 points, or 0.3%, to set the day before, while the Nasdaq composite gained 0.6% as Microsoft and Big Tech led the way.
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Stock markets abroad mostly fell after said he on Mexico, Canada and once he takes office. But the movements were mostly modest. Stock indexes were down 0.1% in Shanghai and nearly flat in Hong Kong, while Canada鈥檚 main index edged down by less than 0.1%.
Trump has often praised the , but investors are weighing whether his latest threat will actually become policy or is just an opening point for negotiations. For now, the market seems to be taking it more as the latter.
The consequences otherwise for markets and the global economy could be painful.
Unless the United States can prepare alternatives for the autos, energy products and other goods that come from Mexico, Canada and China, such tariffs would raise the price of imported items all at once and make households poorer, according to Carl Weinberg and Rubeela Farooqi, economists at High Frequency Economics.
They would also hurt profit margins for U.S. companies, while raising the threat of retaliatory tariffs by other countries. And unlike tariffs in Trump鈥檚 first term, his latest proposal would affect products across the board.
General Motors sank 9%, and Ford Motor fell 2.6% because both import automobiles from Mexico. Constellation Brands, which sells Modelo and other Mexican beer brands in the United States, dropped 3.3%. The value of the Mexican peso fell 1.8% against the U.S. dollar.
Beyond the pain such tariffs would cause U.S. households and businesses, they could also push the Federal Reserve to slow or even halt its cuts to interest rates. The Fed had just begun from a two-decade high a couple months ago to offer support for the . While lower interest rates can boost the economy, they can also offer more fuel for inflation.
鈥淢any鈥 officials at the Fed鈥檚 earlier this month said they should lower rates gradually, according to released Tuesday afternoon.
The talk about tariffs overshadowed another mixed set of profit reports from U.S. retailers that answered few questions about how much more shoppers can keep spending. They鈥檒l need to stay resilient after helping the economy avoid a recession, despite the high interest rates imposed by the Fed to get inflation under control.
A report on Tuesday from the Conference Board said improved in November, but not by as much as economists expected.
tumbled 17% after its results for the latest quarter fell short of analysts鈥 expectations. CEO Tom Kingsbury said sales remain soft for apparel and footwear. A day earlier, Kingsbury said he plans to step down as CEO in January. Ashley Buchanan, CEO of Michaels and a retail veteran, will replace him.
fell 4.9% after likewise falling short of analysts鈥 expectations. Dick鈥檚 Sporting Goods topped forecasts for the latest quarter thanks to a strong back-to-school season, but its stock lost an early gain to fall 1.4%.
Still, more stocks rose in the S&P 500 than fell. J.M. Smucker had one of the biggest gains and climbed 5.7% after topping analysts鈥 expectations for the latest quarter. CEO Mark Smucker credited strength for its Uncrustables, Meow Mix, Caf茅 Bustelo and Jif brands.
also helped prop up U.S. indexes. Gains of 3.2% for Amazon and 2.2% for Microsoft were the two strongest forces lifting the S&P 500.
All told, the S&P 500 rose 34.26 points to 6,021.63. The Dow gained 123.74 to 44,860.31, and the Nasdaq composite climbed 119.46 to 19,174.30.
In the bond market, Treasury yields held relatively steady following their big drop from a day before driven by relief following Trump鈥檚 pick for Treasury secretary.
The yield on the 10-year Treasury inched up to 4.29% from 4.28% late Monday, but it鈥檚 still well below the 4.41% level where it ended last week.
In the crypto market, bitcoin continued to pull back after late last week. It鈥檚 since dipped back toward $91,000, according to CoinDesk.
It鈥檚 a sharp turnaround from the following Trump鈥檚 election. That boom had also appeared to have spilled into some corners of the stock market. Strategists at Barclays Capital pointed to stocks of unprofitable companies, along with other areas that can be caught up in bursts of optimism by smaller-pocketed 鈥渞etail鈥 investors.
AP Business Writer Elaine Kurtenbach contributed.
