Stock Market Update

[BRIEFING.COM] Today was the first trading day with President Trump officially (back) in office, and it can be written that it was a good start for his administration in term's of the stock market's performance. The latter rallied on the understanding that a barrage of executive orders following yesterday's inauguration did not include any tariff actions against China.

That was deemed a relief by stock market participants who, nonetheless, still had to digest the president's added observation that he is thinking of 25% tariffs for Canada and Mexico starting February 1. It was not lost on stock market participants either that tariff actions against China are likely in the offing, but they seemingly resolved to take things one day at a time and they liked what they didn't hear yesterday on the tariff front.

The Treasury market seemed to as well, which was a big help for stocks today. The inflation-sensitive 10-yr note saw its yield drop another four basis points to 4.57% after hitting 4.80% a week ago.

That calm response paved the way for carryover buying interest that was broad based and also forged on 3M's (MMM 146.94, +5.91, +4.2%) better-than-expected earnings results, a CBS News report indicating President Trump will be announcing a $500 billion AI infrastructure initiative today that involves OpenAI, Softbank, and Oracle (ORCL 172.59, +11.56, +7.2%), and presumably some fear of missing out on further gains.

The gains were all the more remarkable given that they didn't include Apple (AAPL 222.64, -7.34, -3.2%), Tesla (TSLA 424.07, -2.43, -0.6%), or Microsoft (MSFT 428.50, -0.53, -0.1%). Apple was a real outlier today, feeling the pinch of analyst downgrades at Jefferies and Loop Capital, and a Bloomberg report suggesting its iPhone sales dropped 18% in China during the December quarter.

The S&P 500 energy sector (-0.6%) for its part was also an outlier. It was the only sector to record a loss, which followed President Trump's declaration of a national energy emergency that will allow for increased oil and gas production. WTI crude futures settled 1.7% lower at $75.99 per barrel, pressured by the notion that a "drill, baby, drill" approach could create too much supply.

The other 10 S&P 500 sectors, though, were on board with the rally effort. The industrials sector (+2.0%) topped today's performance rankings along with the real estate (+1.8%), health care (+1.7%), utilities (+1.6%), and materials (+1.3%) sectors in a predominately pro-growth tape.

Accordingly, small-cap and mid-cap stocks outperformed their larger brethren, value stocks as a group outperformed growth stocks, and breadth overwhelmingly favored advancers over decliners at the NYSE and Nasdaq.

The major indices all closed at, or near, their highs for the session on a day that was devoid of notable economic data.