The Dow Jones Industrial Average rose after the market digested the first day of the new Donald Trump presidency. China stocks were bolstered by hopes on tariffs but Apple (AAPL) lagged on the stock market today.
Stocks were off to a mostly positive start as they look to build on last week’s bullish close. The Dow industrials rose nearly 300 points, which equates to a rise of 0.7%. 3M (MMM) jumped nearly 5% after an earnings beat. However Apple fell more than 3%.
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The Nasdaq composite lagged amid weakness in tech. It was up 0.1% in morning trading. It now sits about 1% above its 50-day moving average. Grail (GRAL) was a standout stock as it popped more than 9%. Palo Alto Networks (PANW) also impressed with a gain of more than 4%.
Bitcoin play MicroStrategy (MSTR) also lagged badly, though, plunging more than 5%. The cryptocurrency itself was down almost 2% and is trading for just under $103,000 per token, according to CoinDesk.
Stock Market Today: Utilities, Real Estate Shine
The S&P 500 was up 0.4%. This allowed it to move further above its 50-day line, which it recaptured Friday. Moderna (MRNA) outperformed here as it rallied nearly 7%.
The Invesco S&P 500 Equal Weight (RSP) exchange traded fund rose nearly 1% amid broad gains.
Another plus for the stock market today was that the S&P 500 sectors were mostly positive. Utilities, industrials and real estate were faring best. Only energy and technology stocks were lower.
Small caps were flexing their muscles in early action. The Russell 2000 index popped more than 1% as the small-cap index trades near the 2,300 level.
Growth leaders were even stronger. The Innovator IBD 50 ETF (FFTY) outperformed with a gain of 1.5%. The fund reclaimed its 50-day moving average and sits nearly 2% above the benchmark.
Stock Market Weighs Up Trump Day One
Traders digested the first day of the new Trump administration.
He has already started the process of withdrawing the U.S. from the World Health Organization, issued almost 1,600 pardons related to the Jan. 6, 2021, Capitol riot and declared a national emergency at the U.S.-Mexico border.
He also issued an executive order pulling the U.S. out of the Paris Climate Agreement.
Crucially, Trump did not embark on a so-called shock-and-awe approach to tariffs. However, he did say 25% tariffs could be levied on Canada and Mexico starting Feb. 1.
China Stocks Inch Up Amid Trump Hopes
Hopes are also rising that Trump may seek to reset relations with China, the U.S.’ biggest economic rival.
“Trump wants a deal. Otherwise, he would have shot up China on Day One,” Alicia Garcia Herrero, Natixis’ chief economist for the Asia Pacific, told Reuters. “He ran a campaign which was very aggressive toward China, and then on Day One shied away from it.”
She also believes that China will “offer Trump whatever he needs to do a deal.” This could ultimately benefit both sides because, as trade tensions cool, economic activity could be boosted.
The prior Biden administration had increased the pressure on China with measure such as limiting AI chip exports. Nvidia (NVDA) had been critical of these measures.
China stocks were mixed, with a positive bias, in early action. E-commerce play JD.com (JD) reversed lower less than 1%, while Alibaba (BABA) trimmed gains to 0.3%. Temu parent PDD (PDD) also reversed lower.
Warren Buffett-backed electric vehicle play BYD (BYDDF) popped more than 4%. It has rallied clear of its 50-day line, which could be used as an early entry by aggressive investors. It has also formed an undefined pattern with an ideal buy point of 42, MarketSurge analysis shows.
The iShares MSCI China ETF (MCHI) saw initial gains fade but remained up 0.3%.
Cathie Wood Loads Up On AI Stock Amid Plunge
They say that fortune favors the bold. And that was certainly the case for ARK Invest Chief Executive Cathie Wood.
Her firm, where she also serves as chief investment officer, loaded up on Tempus AI (TEM) on Friday. It snapped up more than 159,000 shares for the ARK Innovation ETF (ARKK).
Friday’s closing price of 35.15 was a 56% decline from its Nov. 12 high of 79.49.
Ark is already firmly in the green on the newly added shares, as the stock rocketed more than 30% on the stock market today.
Tempus uses data and artificial intelligence to improve health care. It aims to help drug discovery and genomic sequencing.
Nevertheless, it still looks like a risky investment. It has lost money in each of the past five years and holds an IBD Composite Rating of just 14 out of 99.
The Ark Innovation ETF also added nearly 126,000 shares in Crispr Therapeutics (CRSP). It sold shares of UiPath (PATH) and Roblox (RBLX).
Please follow Michael Larkin on X at @IBD_MLarkin for more analysis of growth stocks.
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