The U.S. stock market closed higher on Tuesday, with Apple shares rising 1.4%, fueling a rise in the Nasdaq index. Nvidia shares fell 0.6%, while Tesla shares rose 3.45%, extending a 12% gain from the previous day. Investors focused on remarks by President Trump regarding automotive tariffs, particularly his suggestion that the tariff measures might not be fully implemented by April 2. Trump's tariff policies have raised concerns about inflation and economic growth, leading to approximately a 2% drop in the S&P 500 index year to date.
Baird investment strategist Ross Mayfield stated that although the market may not receive clear policy guidance, investors still hope for more explicit information about trade policies, which could be a key market trigger. The impact of Trump's policies lies in the possibility of tariffs driving up inflation and affecting economic growth, with the market closely watching upcoming related data.
Additionally, Moody's warned on Tuesday that as the U.S. budget deficit widens and its debt-carrying capacity declines, America's fiscal strength may continue to deteriorate in the coming years. Meanwhile, the consumer confidence index for March fell to 92.9, the lowest level since February 2021, indicating consumer concerns about economic prospects.
Among the eleven sectors of the S&P 500 index, seven rose, with the communication services sector gaining the most at 1.43%, followed by consumer discretionary at 0.98%. Federal Reserve Governor Cook noted that while the Fed's interest rate policy remains restrictive, progress towards the inflation target of 2% has slowed. New York Fed President Williams pointed out that businesses and households' uncertainty about the future economy has increased.
This week, the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, will be released on Friday, providing further inflation information to the market.
