An image of US President-elect Donald Trump is displayed as traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on November 26, 2024, in New York City.
The S&P 500 rose on Tuesday as investors looked past the threat of new tariffs from President-elect Donald Trump.
The broad market index advanced nearly 0.4%, while the Nasdaq Composite climbed 0.3%.The Dow Jones Industrial Average ticked higher by 30 points, or 0.1%, weighed down by a slide of 8% in Amgen.
Trump on Monday night called for a 25% tariff on products from Mexico and Canada, as well as an additional 10% levy on Chinese goods. He has already said he would impose a tariff of up to 20% on all imports, and an additional duty of at least 60% on products from China.
"Markets have become a lot more comfortable with the prospects of these tariffs being more bluster and more negotiating tactics than actual implementation," said Jamie Cox, managing partner at Harris Financial. "Basically, what a lot of people think is that the rhetoric is a lot stronger than what the eventual tariffs will be."
While the S&P 500 rose, some individual names and funds moved as investors analyzed potential impacts from the policies Trump discussed. Automakers Ford and General Motors slid more than 2% and 8%, respectively. Alcohol company Constellation Brands, known in part for Mexican beers Corona and Modelo, fell more than 3.5%.
The iShares MSCI Mexico ETF (EWW), which tracks a basket of equities tied to America's southern neighbor, shed nearly 3%. Mexican President Claudia Sheinbaum Pardo indicated on Tuesday that any new tariffs on her country would be met with retaliatory tariffs on exports from the U.S. to Mexico.
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These moves come after the announcement of Trump's Treasury secretary pick, hedge fund executive Scott Bessent, helped bolster the belief that the postelection rally is back in full gear on Monday. Both the Dow and S&P 500 hit new intraday records in Monday's session, with the former also finishing the day at an all-time closing high.
Money Report
The small cap-focused Russell 2000 also notched a fresh high on Monday, marking its first new intraday record since 2021. But the index pulled back 0.8% in Tuesday's session.
Investors also monitored minutes from the Federal Reserve meeting released Tuesday afternoon. The central bank said it expects interest rate cuts in the future, but to only expect them "gradually."
"In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2 percent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time," the minutes stated.
The U.S. market is dark on Thursday for the Thanksgiving holiday and set to close early Friday. Trading volume is expected to remain light.
Tactical indicators suggest there's still more upside for stocks, Canaccord Genuity says
There are some signs that the stock market is trending toward being overbought, but investors should stay bullish for now, according to Canaccord Genuity.
Analyst Michael Welch said in a note to clients that tactical indicators are not showing "a cause for concern" even with the stock market trading near record highs.
"We continue to believe that with a Fed rate cut cycle in place, a favorable seasonal period, and a two-year-old bull market that remains below the median in both percent gain and duration, now is not the time to fight the Fed or the tape, but it is an opportunity for investors to position for further upside, especially on any near-term weakness," Welch said.
— Jesse Pound
Stocks making the biggest moves midday
These are some of the companies making headlines in midday trading:
- Kohl's — Shares tumbled 18% after the retailer cut its sales outlook amid an uncertain holiday backdrop. The latest quarter's earnings and sales fell short of Wall Street analysts' estimates, and the CEO will step down in January.
- Amgen — The biotech fell more than 3% after an experimental weight loss drug helped patients lose up to 20% of their weight after a year, the low end of investor expectations. Some analysts had been hoping for weight loss up to 25% in the phase two trial.
- Morgan Stanley — The Wall Street investment bank pulled back more than 2% after HSBC downgraded it to hold from buy, citing a less attractive risk-to-reward balance.
Read the full list here.
— Brian Evans
Deutsche Bank says three factors could stop market rally
While the stock market has had a strong year so far, it's still vulnerable to several risks, Deutsche Bank said in a note Tuesday.
There have been several "wobbles" already this year, but each time the driver of the sell off subsided, the markets recovered quickly, said macro strategist Henry Allen.
"So given how markets have already reacted to various shocks this year, it's clear that any one of these factors could drive a fresh selloff, particularly if they became a more persistent and longer-lasting problem," he wrote.
The first risk to the rally is an economic downturn, Allen said. The biggest selloff in 2024 came in August thanks to an underwhelming jobs report. The second risk is mounting political tensions, he said. Stocks struggled in April when there were geopolitical tensions in the Middle East, he noted. The third factor is inflation shock, he said.
– Michelle Fox
Trump's tariff proposals could push inflation up by nearly 1%, Goldman says
The tariffs on China, Canada and Mexico announced by President-elect Trump on Monday could result in the Federal Reserve's preferred inflation gauge jumping nearly 1%, according to Goldman Sachs.
"Using our rule of thumb that every 1 [percentage point] increase in the effective tariff rate would raise core PCE prices by 0.1%, we estimate that the proposed tariff increases would boost core PCE prices by 0.9% if implemented," Goldman chief economist Jan Hatzius said in a note to clients.
The proposed tariffs would cover 43% of U.S. goods imports, and the tariffs would result in slightly less than $300 billion in revenue annually, according to Goldman Sachs calculations.
— Jesse Pound
Small caps retreat after touching record levels
Small-cap stocks pulled back on Tuesday, one day after reaching record levels for the first time in three years.
The small cap-focused Russell 2000 slid 0.8% in Tuesday's session. By comparison, the S&P 500 ticked 0.2% higher.
Tuesday's Russell 2000 underperformance comes a day after the index broke past 2021 highs to notch a new intraday record. The index finished Tuesday's session about 1.5% higher, which marked its sixth positive trading day in a row.
— Alex Harring
Amgen heads for worst day in more than 24 years
Amgen sank nearly 12% on Tuesday, putting shares of the drugmaker on pace for their worst day since October 2000.
The decline came after the company released results from a midstage trial of its experimental weight loss injection called MariTide. The results showed that patients lost up to 20% of their weight after a year of use.
Those results came in at the lower range of Wall Street's expectations for the drug, with some hoping for weight loss of at least 20%, or up to 25%.
— Samantha Subin
Retail stocks on pace for worst day in more than a month
The SPDR S&P Retail ETF (XRT) fell nearly 2% on Tuesday after President-elect Trump threatened new tariffs on imported goods from China, Mexico and Canada. The decline put the fund on pace for its biggest one-day loss since Oct. 7.
Leslie's was the biggest laggard in the XRT, losing 25%, while Kohl's shed 21%.
— Fred Imbert
Consumer confidence rises in Conference Board survey
Consumer confidence moved higher in November while expectations for the stock market climbing hit a new record, the Conference Board reported Tuesday.
The organization's consumer confidence index increased to 111.7, or 2.1 points higher than October and slightly above the Dow Jones estimate for 111. Increased expectations for the labor market helped drive the move.
At the same time, 56.4% of respondents said they expect stock market prices to be higher a year from now, a fresh record. Inflation expectations also improved, with the five-year outlook down to 4.9%, the lowest since March 2020.
— Jeff Cox
New home sales slide, prices rise as rates jump
New home sales tumbled more than 17% in October as mortgage rates surged, the Census Bureau reported Tuesday.
Sales of new single-family homes totaled just 610,000 seasonally adjusted, down from the unrevised 738,000 in September and well below the Dow Jones consensus estimate for 725,000. Inventory stood at 9.5 months worth of supply.
Though sales were down, prices jumped. The midpoint sales price increased to $437,300, while the average price leaped to $545,800.
The numbers come as the borrowing rate for a 30-year mortgage rose to 6.72%, or about 0.6 percentage points above where it started the month, according to Freddie Mac.
— Jeff Cox
Biden calls for Medicare coverage of anti-obesity drugs. Novo Nordisk, Eli Lilly shares jump
Shares of Novo Nordisk and Eli Lilly were rising Tuesday on the back of comments from the Biden administration, urging Medicare and Medicaid coverage for anti-obesity drugs such as Wegovy and Zepbound. Novo Nordisk shares rose more than 2%, while Eli Lilly's stock popped more than 3%.
The federal health insurance programs are currently banned from covering drugs for the purpose of weight loss, which is why the drugmakers have been working to detail other benefits these medications can have on comorbidities such as heart disease and sleep apnea. Lobbyists have also been pushing for a legislative change that would make coverage possible, but Biden's proposal aims to bypass this.
Morgan Stanley analyst Terence Flynn said there are still several unknowns, so the full effect on the stocks is unclear at this point. However, expanding coverage of the drug to people insured by these programs could be a windfall for these companies.
Biden's proposal suggests 3.4 million Medicare enrollees and 4 million Medicaid enrollees would gain coverage, Wells Fargo analyst Mohit Bansal said. However, that estimate appears far lower than the Congressional Budget Office projection of 23 million Medicare enrollees with obesity, which leads him to believe patients would need to have another condition to get access to the drugs.
— Christina Cheddar Berk
S&P 500 opens slightly up
The S&P 500 kicked off Tuesday's session modestly in the green.
The broad index rose 0.2% shortly after 9:30 a.m. ET. The Nasdaq Composite advanced 0.4%.
The Dow slid 0.4%, however, as a drop in Amgen weighed on the blue-chip average.
— Alex Harring
Bernstein is bullish on Royal Caribbean
Bernstein believes with the cruise industry on an upward trajectory, Royal Caribbean is the best way to play the sector.
Analyst Richard Clarke initiated coverage on Royal Caribbean with an outperform rating and $290 price target, which implies 20.6% upside potential from Monday's close.
"Cruise has changed for the better: from an operational perspective, bigger boats and private island resorts are reversing the prior demographic and capacity constraint headwinds, and have set the sector for ongoing share gains," Clarke wrote in a research note on Monday.
"Royal Caribbean has hit cruising speed faster with its record margins and ROIC by investing in larger ships and private islands," Clarke added.
Shares have rallied nearly 86% in 2024.
— Hakyung Kim
Eli Lilly, Best Buy and Abercrombie & Fitch among stocks making biggest premarket moves
Check out some of the companies making moves before the bell:
- Abercrombie & Fitch — Shares slipped nearly 4% despite the apparel retailer's earnings beat and strong holiday guidance. Abercrombie & Fitch reported third-quarter earnings of $2.50 per share, topping the $2.39 per share LSEG consensus estimate. Revenue was $1.21 billion, versus the $1.19 billion expected. The company also raised its full-year guidance.
- Best Buy — Shares slid 7.4% after Best Buy posted third-quarter results that missed analysts' expectations and cut its full-year sales forecast. Adjusted earnings of $1.26 per share came in below the $1.29 in earnings per share expected by analysts polled by LSEG. Revenue of $9.45 billion missed the $9.63 billion consensus estimate.
- Novo Nordisk, Eli Lilly — Shares of drugmakers Novo Nordisk and Eli Lilly rose more than 2.5% and 4.7%, respectively, after the Biden administration proposed a new rule that Medicare and Medicaid would cover costly weight loss drugs for Americans with obesity. Novo Nordisk's Wegovy and Eli Lilly's Zepbound weekly injectables treat obesity.
For the full list, read here.
— Pia Singh
Kohl's shares plummet following earnings miss
Shares of Kohl's plunged more than 17% during premarket trading after the retailer's third-quarter results missed Wall Street's expectations.
In the quarter, the company earned 20 cents per share on $3.51 billion in revenue, below the consensus estimate of 28 cents per share and $3.64 billion in revenue, according to LSEG. Meanwhile, comparable sales dropped 9.3% for the period, while analysts were expecting a decline of 5.1%.
Shares have also been in the red this year, falling around 36% year to date.
— Sean Conlon
Best Buy shares slide after earnings
Best Buy shares slid more than 7% in premarket trading after the consumer electronics retailer posted third-quarter results that missed on the top and bottom lines, and cut its full-year sales forecast.
Adjusted earnings of $1.26 per share came in below the $1.29 in earnings per share expected by analysts polled by LSEG. Revenue of $9.45 billion missed the $9.63 billion consensus estimate.
— Sarah Min
Dick's Sporting Goods shares pop on earnings beat, guidance raise
Dick's Sporting Goods shares jumped more than 5% before the bell on Tuesday after the retailer posted strong earnings and guidance.
The Pennsylvania-based company earned an adjusted $2.75 per share on $3.06 billion in revenue in the third quarter. That is ahead of the forecasts for $2.68 in earnings per share and $3.03 billion in revenue from analysts polled by LSEG.
Dick's also lifted its full-year outlook.
Shares have surged more than 46% in 2024, putting the stock on track for its seventh straight winning year.
— Alex Harring, Gabrielle Fonrouge
Amgen falls after obesity drug trial results
Amgen shares fell more than 3% in the premarket after the company said its experimental weight loss drug helped patients lose up to 20% of their weight after a year. However, those trial results appeared to be on the low end of investor expectations.
— Fred Imbert
HSBC downgrades big bank names
HSBC is stepping to the sidelines on investment banking giants Goldman Sachs and Morgan Stanley following a strong year for the stocks.
Analyst Saul Martinez downgraded both bank stocks to hold from buy. Meanwhile, he raised his price target on Goldman Sachs to $608 from $569, implying less than 1% upside potential from Monday's close. He also increased his Morgan Stanley price target by just $3 to $131.
Shares of Morgan Stanley have rallied 43.3% year to date, while Goldman Sachs shares have surged 56.3% in 2024.
Following the two stocks' big gains, "a higher bar has been set" with less attractive risk/reward profiles, according to Martinez.
We are "more positive on fundamentals, less positive on stocks," Martinez wrote in a Monday note.
— Hakyung Kim
U.S. dollar hits highest level in more than 4 years against Canadian currency
The U.S. dollar hit a high of $1.4177 per Canadian dollar — a level not seen since April 2020 — after President-elect Trump threatened to impose tariffs on goods coming in from Canada and Mexico. The Mexican peso also hit a low of 20.75 against the greenback and was last down more than 1%.
— Fred Imbert, Gina Francolla
Europe stocks open lower
European stock markets opened broadly lower Tuesday, with the benchmark Stoxx 600 index falling 0.63% in early deals.
France's CAC 40 lost 0.78%, while Germany's DAX and the U.K.'s FTSE 100 traded down 0.66% and 0.4%, respectively.
— Jenni Reid
Asia-Pacific markets trade mixed after U.S. stocks hit new highs overnight
Asia-Pacific markets traded mixed Tuesday, in contrast to Wall Street, which saw U.S. benchmarks notching record highs following President-elect Trump's choice of Treasury secretary.
Australia's S&P/ASX 200 fell 0.69% to close at 8,359.4 after hitting a new all-time closing high on Monday.
Japan's Nikkei 225 shed 0.87% to close at 38,442, while the Topix lost 0.96% to close at 2,689.55. Japan's service PPI rose 2.9% year on year, higher than the 2.8% rise the previous month.
The Kospi slid 0.55% to end at 2,520 and the Kosdaq lost 0.53% to close at 693.15.
Hong Kong's Hang Seng Index traded 0.05% higher in its last hour of trade, while mainland China's CSI 300 added 0.21% to close at 3,840.18.
— Lee Ying Shan
Trump vows an additional 10% tariff on China, 25% tariffs on Canada and Mexico
President-elect Trump plans to raise tariffs an additional 10% on all Chinese goods coming into the U.S., according to a post Monday on his social media platform Truth Social.
The post immediately followed one in which Trump said his first of "many" executive orders on Jan. 20 would impose tariffs of 25% on all products from Mexico and Canada.
Trump is set to be inaugurated as the next U.S. president on Jan. 20.
— Evelyn Cheng
Gold plunges 3% as Trump Treasury pick and potential Israel-Hezbollah truce fuel risk-on mood
Gold prices lost about 3% after President-elect Trump picked Scott Bessent as his Treasury secretary, with reports of Israel and Hezbollah nearing a ceasefire deal also eroding the safe-haven metal's appeal.
Spot prices of the yellow metal dropped 3.44% to $2,616.80 per ounce, according to data from FactSet. Gold futures on the New York Mercantile exchange were trading at $2,628.5.
"The ~$100 wipeout in Gold today is as severe in size & pace as the post U.S. election selloff on Nov 6th," MKS Pamp's head of metals strategy, Nicky Shiels, said.
Read the full story here.
— Lee Ying Shan
Rumble shares rise after company announces bitcoin treasury strategy
Rumble, a video platform focused on conservatives, said Monday evening that it will begin allocating a portion of its excess cash reserves to bitcoin and making purchases of up to $20 million in the cryptocurrency.
Shares rose nearly 4% in extended trading.
The move puts Rumble in the same company as MicroStrategy, which began employing an aggressive bitcoin-buying strategy in 2020 and has primarily traded as a proxy for the crypto's price since then. That stock is up more than 500% this year. Meanwhile, bitcoin has gained 118%.
For more, read our full story here.
— Tanaya Macheel
Trump calls for 25% tariffs on Canada and Mexico
President-elect Donald Trump pledged he would impose a 25% tariff on products coming into the U.S. from Canada and Mexico, according to a Monday post on his social media platform Truth Social.
"On January 20th, as one of my many first Executive Orders, I will sign all necessary to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States," Trump said in his Truth Social post.
He also pledged "an additional 10% tariff" on Chinese goods. The president-elect has already proposed imposing a duty as high as 20% on all imports, including levies exceeding 60% on products from China.
Read more about the tariffs from CNBC's Evelyn Cheng here.
— Darla Mercado
Stocks on the move during overnight trading
Here are the stocks on the move in extended trading:
- Zoom Communications — The maker of video calling software is lower by 4%. Zoom topped Wall Street quarterly estimates and posted fiscal fourth-quarter adjusted earnings per share guidance that was roughly in line with estimates.
- Kohl's — The retail stock dropped 3% after announcing its CEO would step down in January. Ashley Buchanan, who currently leads crafts store owner The Michaels Companies, is set to replace current CEO Tom Kingsbury.
- Agilent Technologies — Shares slumped 1% after the laboratory equipment company issued adjusted earnings guidance for the full year and current quarter that fell short of Wall Street's estimates, per LSEG.
Read the full list here.
— Samantha Subin
Stock futures open slightly higher
Stock futures opened slightly higher Monday.
Futures tied to the Dow Jones Industrial Average added 45 points, or 0.1%, while S&P 500 futures and Nasdaq 100 futures each rose about 0.15%.
— Samantha Subin
