NEW YORK: Wall Street rose on Tuesday, boosted by the possibility of tariff relief for the auto sector and gains in financial stocks after Citigroup and Bank of America’s results.
US President Donald Trump on Monday hinted at potential exemptions for the 25% tariffs imposed on imports of autos and auto parts.
The financial index rose 1.3% to lead sector gains, boosted by advances of 4.1% and 2.7% in Bank of America and Citigroup, respectively, after the banks reported strong quarterly profits driven by higher trading revenue.
However, gains were capped by Federal Register filings that showed the Trump administration was also proceeding with probes into imports of pharmaceuticals and semiconductors, as part of a bid to impose tariffs on the sectors.
Healthcare stocks slipped 0.3%.
Many investors were also looking for buying opportunities after sharp declines over the past weeks, said Paul Gray, managing partner, Ironhold Capital.
“Smart money, for the most part is putting money to work,” Grey said, referring to institutional capital.
“But the stock market likes certainty and what we have now is a lot of uncertainty, which is why you’re seeing a lot of this volatility day to day.”
Rapid changes in US trade policy have sparked steep market selloffs, and left investors, companies and consumers confused over the outlook for policy and economic growth.
Some of that volatility, however, has benefited banks, with major lenders such as JPMorgan Chase reporting strong revenues from their trading businesses.
An index of banks stocks was up 1.9%, and a gauge of regional banks jumped 2.6%.
At 11:32 a.m. the Dow Jones Industrial Average rose 139.51 points, or 0.34%, to 40,664.30, the S&P 500 gained 25.80 points, or 0.48%, to 5,431.77 and the Nasdaq Composite gained 77.33 points, or 0.46%, to 16,908.82.
Corporate results will be closely monitored over the coming weeks for indications on how companies and consumers are coping with changes in trade policy.
Johnson & Johnson’s shares edged lower after the company missed estimates for sales of medical devices, despite beating Wall Street estimates for first-quarter revenue and profit.
Most analysts expect markets to remain volatile, until there’s more clarity on tariffs. The S&P 500 has lost 7.8% this year.
The S&P 500’s 50-day moving average (DMA) slipped below the 200-DMA on Monday, producing a “death cross” pattern that suggests a short-term correction could turn into a longer-term downtrend.
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