Stock ETFs Surge but Tesla Lags Amid Trump's Return
ETFs reacted to Trump's return to office and subsequent flurry of executive orders and comments on tariffs.
Most exchange-traded funds rallied on Tuesday after Donald Trump officially became president for a second time.
The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) climbed 0.9% and 0.6%, respectively, at the close on Tuesday as investors digested Trump’s first executive orders and his latest comments on tariffs.
Investors were relieved that the new president didn’t enact sweeping tariffs on America’s trading partners on his first day in office as he previously threatened he would.
However, Trump said he remained committed to using tariffs as a tool to achieve his aims, even going as far as to say that he would institute levies of 25% on Canada and Mexico next month.
“We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people [across the border],” Trump told journalists in the Oval Office. “I think we’ll do it Feb. 1.”
Mexico, Canada ETFs Still Trading Up Despite Tariff Talk
Despite the threat, the iShares MSCI Mexico ETF (EWW) and the iShares MSCI Canada ETF (EWC) traded up by 1.9% and 1.8%, respectively.
Investors may be jumping into the ETFs in hopes that Trump’s tariff bite isn’t as bad as his bark. The two funds fell significantly in December when Trump’s tariff rhetoric reached its peak.
One country that seems to have escaped Trump’s tariff wrath completely— at least for now— is, surprisingly, China.
Trump said he would study the trade situation with China and try to work out a deal with Chinese President Xi. The iShares MSCI China ETF (MCHI) traded up by 0.7%.
EV Mandate Scrapped, Crypto Task Force Created
While tariffs were the big focus for the stock market during Trump’s first day, for individual industries and stocks, some of his other actions made waves as well.
The president withdrew the U.S. from the Paris Climate Agreement, scrapped the Biden administration’s rule requiring vehicle makers to cut greenhouse gas emissions, and ordered the end of subsidies for electric vehicles.
Shares of the Invesco Solar ETF (TAN) shed 2.1%, while the Direxion Daily TSLA Bull 2X Shares (TSLL) lost 1.3%.
Another area that was closely following Trump’s moves was the crypto industry.
On Tuesday, Trump delivered on a big promise he made to the crypto community with the creation of a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The iShares Bitcoin Trust ETF (IBIT) gained 1.3% as bitcoin traded close to record highs.
On the other hand, the iShares Ethereum Trust ETF (ETHA) dropped 6%. Ethereum’s native cryptocurrency struggled over the weekend after the Trump meme coin launched on the competing Solana blockchain.