[UNITED STATES] U.S. stocks ended the day on a positive note Tuesday, after fluctuating between slight gains and losses amid volatile trading. Investors weighed the latest corporate earnings, economic data, and shifts in trade policy. U.S. Treasury Secretary Scott Bessent forecasted that China could lose up to 10 million jobs swiftly due to tariffs, but also hinted at progress in trade negotiations with other nations, including Japan and India.
The ongoing trade talks with Japan and India could help offset tensions with China. Both countries have expressed a willingness to reach agreements that favor U.S. exports. Analysts suggest that securing deals with these key Asian partners could ease some of the broader market uncertainties, although the impact of tariffs on China remains a major concern.
The trade conflict between the world’s two largest economies has been a central issue, ignited by tariff announcements from the Trump administration on April 2 targeting countries globally. These moves have heightened fears among investors about slowing global growth and a resurgence in inflationary pressures.
Commerce Secretary Howard Lutnick stated that President Donald Trump would sign an executive order granting relief to U.S. automakers from part of his new 25% vehicle tariffs, allowing companies time to bring parts supply chains back to the U.S. The president signed the order just before Tuesday’s market close.
This temporary relief reflects the administration's attempt to balance aggressive trade policies with the practical needs of the auto industry. However, analysts warn that this reprieve may only delay, rather than prevent, higher consumer costs if supply chains aren’t swiftly reorganized. The move also underscores the delicate balance between trade policy and domestic manufacturing priorities.
Automaker stocks showed little response to the potential easing of tariffs, with General Motors shares dropping 0.6% despite reporting strong quarterly results but retracting its annual forecast.
Among the blue-chip Dow components, Honeywell surged 5.4% after posting a rise in adjusted first-quarter profits, and paint maker Sherwin-Williams gained 4.8% following a quarterly profit that exceeded analysts’ expectations. Coca-Cola also saw a 0.8% rise after beating both revenue and profit projections.
Corporate earnings have presented a mixed picture, with certain sectors performing better than others amid trade-related challenges. Industrial and consumer goods firms like Honeywell and Coca-Cola have shown resilience, while automakers and tech companies face heightened scrutiny over their exposure to tariff-induced cost increases. This contrast is expected to influence market behavior in the coming weeks as more earnings reports are released.
“Much of the economic data will be mixed, and it’s going to be difficult to gauge the full impact of tariffs in the next month or two,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
“Companies that are most affected by tariffs are doing what we anticipated—they’re cutting or suspending their guidance,” Saglimbene added.
Economic reports indicated that the trade situation continues to have an increasing effect. The U.S. trade deficit in goods reached a record high in March as businesses brought in goods ahead of impending tariffs. A separate report from the Conference Board showed a significant drop in its consumer confidence index to its lowest level since May 2020, while job openings pointed to a relatively stable labor market.
The widening trade deficit suggests that stockpiling ahead of tariffs may have artificially inflated import levels, leaving questions about whether this trend will reverse in the coming months. Meanwhile, the decline in consumer confidence reflects growing concerns over potential price hikes, even as the labor market remains a bright spot in the economy.
"Trump’s tariffs have caused expectations to plummet," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin. "Perhaps the silver lining is that we’ll likely see some improvement in expectations over the next few months."
The Dow Jones Industrial Average rose 300.03 points, or 0.75%, to 40,527.62, while the S&P 500 gained 32.08 points, or 0.58%, to 5,560.83. The Nasdaq Composite advanced 95.19 points, or 0.55%, to 17,461.32.
More economic data is expected this week, culminating in Friday’s crucial government payrolls report, along with earnings from major companies like Apple and Microsoft. Investors will be focused on any signs of tariff-related impacts. United Parcel Service fell 0.4% after reporting its quarterly results and announcing plans to cut 20,000 jobs due to a reduction in deliveries for Amazon.com.
While all three major indexes remain in negative territory for the year, stocks have shown signs of stabilization in recent weeks, with the S&P 500 marking its sixth consecutive day of gains, its longest winning streak since a seven-day run in November.
HSBC became the latest brokerage to lower its year-end target for the S&P 500 index, reducing it to 5,600 from an earlier target of 6,700.
This downward revision reflects growing caution among institutional investors, who are adjusting their expectations amid trade uncertainties and mixed economic signals. However, the market’s recent resilience suggests that some investors may be betting on a faster resolution to trade tensions or stronger-than-expected corporate performance in the second half of the year.
Wells Fargo gained 2.4% after announcing a stock buyback program of up to $40 billion. Advancing issues outpaced decliners by a 2.38-to-1 ratio on the NYSE and by a 1.55-to-1 ratio on the Nasdaq. The S&P 500 posted six new 52-week highs and six new lows, while the Nasdaq Composite recorded 37 new highs and 59 new lows. Volume on U.S. exchanges totaled 20.02 billion shares, compared with the 19.46 billion average for the full session over the past 20 trading days.
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