U.S. stocks witnessed a remarkable surge to new records on Tuesday. This came after Donald Trump's latest remarks about tariffs had only a limited impact on Wall Street. However, the potential consequences for the global economy if these tariffs were to be implemented are significant.

Impacts on Different Indices

The S&P 500 climbed 0.6% to surpass the all-time high it achieved a couple of weeks ago. The Dow Jones Industrial Average added 123 points, or 0.3%, reaching its own record set the day before. Meanwhile, the Nasdaq composite gained 0.6% as Microsoft and other Big Tech companies led the way. This shows the dominance of these tech giants in driving the market upward.

Stock Market Abroad

Stock markets abroad faced a different scenario. After President-elect Trump announced his plans to impose sweeping new tariffs on Mexico, Canada, and China upon taking office, they mostly fell but only modestly. In Shanghai, stock indexes were down 0.1%, and in Hong Kong, they were nearly flat. Canada's main index also edged down by less than 0.1%. This indicates that while there was a reaction, it was not a significant one.

Effects on Specific Companies

General Motors sank 9% and Ford Motor fell 2.6% as they import automobiles from Mexico. Constellation Brands, which sells Mexican beer brands in the US, dropped 3.3%. The value of the Mexican peso also fell 1.8% against the US dollar. These examples clearly show how specific industries and companies are affected by the tariff talks.

Impact on the Fed

The talk about tariffs overshadowed another aspect - the Fed's decisions. Many officials at the Fed's last meeting earlier this month said they should lower rates gradually. This is because the tariffs could push the Fed to slow or even halt its cuts to interest rates. The Fed had just begun easing its main interest rate from a two-decade high a couple of months ago to support the job market. While lower interest rates can boost the economy, they can also lead to inflation.

Profit Reports and Retail Stocks

A report from the Conference Board said US consumer confidence improved in November but not as much as expected. Kohl's tumbled 17% after its latest quarter results fell short of analysts' expectations. CEO Tom Kingsbury said sales for apparel and footwear remain soft. A day earlier, he announced his plan to step down as CEO in January, and Ashley Buchanan will replace him. Best Buy also fell 4.9% for the same reason. However, more stocks rose in the S&P 500 than fell. J.M. Smucker had a big gain, climbing 5.7% after topping analysts' expectations. This shows the mixed performance of retail stocks.

Big Tech's Role

Big Tech stocks played a crucial role in propping up US indexes. Gains of 3.2% for Amazon and 2.2% for Microsoft were the two strongest forces lifting the S&P 500. These tech giants have a significant influence on the market and continue to drive its growth.In the bond market, Treasury yields held relatively steady following their big drop from the previous day driven by relief after Trump's pick for Treasury secretary. The yield on the 10-year Treasury inched up to 4.29% from 4.28% late Monday but is still below the 4.41% level where it ended last week.In the crypto market, bitcoin continued to pull back after reaching a new high of over $99,000 late last week. It has since dipped back toward $91,000. This shows the volatility of the crypto market and how it is affected by various factors.All told, the S&P 500 rose 34.26 points to 6,021.63. The Dow gained 123.74 to 44,860.31, and the Nasdaq composite climbed 119.46 to 19,174.30. These figures highlight the overall performance of the major indices on Tuesday.