The New York Stock Exchange ended higher on Tuesday, little shaken by the announcements of Donald Trump who promised to introduce increases in customs duties against Mexico, China and Canada, the Dow Jones and the S&P 500 even recording new closing records.
The Dow Jones gained 0.28%, while the Nasdaq index gained 0.63% and the broader S&P 500 index gained 0.57%.
First taken off guard, the American market then calmly digested President-elect Donald Trump’s announcements aimed at imposing customs duties of 25% on products imported into the United States from Canada and Mexico, as well as adding 10 % customs taxes for goods coming from China.
He justified this decision by the need to push these three countries to do more to fight against drug flows from their territory to the United States.
“In theory, the increase in customs duties should not be good news for stocks, but (…) the market has chosen to see it as a negotiating tactic”noted to AFP Steve Sosnick, of Interactive Brokers.
“The atmosphere is generally positive”he added, even if he did not necessarily note “aggressive purchasing” from investors.
“The gains of some large caps boosted the S&P 500 and the Nasdaq Composite”also indicated Patrick O’Hare, of Briefing.com, in a note.
THE “Magnificent Seven”the nickname given to the big names in the technology sector, almost all finished in the green, like Alphabet (+0.70%), Amazon (+3.18%), Nvidia (+0.66% ) or even Apple (+0.94%).
“If these stocks are up, that’s usually enough to pull the market up.”and sheet music by M. Sosnick.
Trump’s announcements relating to customs duties, however, weighed down the American automobile sector, with General Motors (-9.03%) at the forefront.
“A large portion of their cars are assembled in Mexico and Canada, or contain parts from Mexico, Canada and China”recalled Mr. Sosnick.
“So it’s not a good thing for them if their supply chain is affected by the tariffs”he added.
In terms of indicators, investors particularly monitored consumer confidence in the United States, which recorded a further increase in November, notably due to Americans’ optimism regarding the job market.
On the other hand, sales of new homes fell sharply in October in the United States, largely disappointing market expectations which were expecting a much less marked decline.
Wall Street also kept an eye on the report (minutes) of the American central bank (Fed), published Tuesday, with all officials of the financial institution believing that the rate cut should be achieved “gradually”.
On the bond market, the yield on 10-year US government bonds rose to 4.29% compared to 4.27% the day before at closing.
After shining following the explosion of bitcoin in recent weeks, cryptocurrency players followed its fall.