The three major New York stock indices all climbed on Thursday despite U.S. President Donald Trump’s executive order on reciprocal tariffs.
In the executive order, Trump declared that all non-tariff barriers would be treated as taxes, and the U.S. would respond with equivalent tariffs.
However, Howard Lutnick, the nominee for Commerce Secretary who will oversee this initiative, stated that the reciprocal tariff investigations would not be completed until April 1, emphasizing that there is still time before any tariffs take effect.
Sensing room for negotiation, investors flocked to buy stocks.
Tesla, which had recently experienced a sharp sell-off, saw its shares surge nearly 6% as investors piled in. Nvidia jumped 3.2% on bullish forecasts for AI semiconductor demand.
Meta Platforms extended its winning streak to 19 trading days, setting new all-time highs for 16 consecutive sessions.
Reciprocal Tariffs Delayed
Trump acted as if the reciprocal tariffs would be implemented immediately, inviting reporters to the White House to sign a dramatic executive order. However, the actual implementation was pushed back to April.
The administration left the door open to adjust tariff decisions based on responses from the counterpart countries.
Investors, who were tense about additional tariffs, breathed relief.
The tech-heavy Nasdaq rose 295.69 points (1.50%) to close at 19,945.64, marking its second straight day of gains.
The S&P 500 and Dow Jones Industrial Average rebounded after a single day of decline.
The Dow climbed 342.87 points (0.77%) to 44,711.43, while the S&P 500 added 63.10 points (1.04%) to reach 6,115.07.
Big Tech’s M7 All Rise
All seven of the largest U.S. tech companies saw their stocks climb.
In particular, Tesla’s rally was notable, rising for two consecutive days.
Tesla shares surged $19.43 (5.77%) to $355.94.
Nvidia finished up $4.15 (3.16%) at $135.29.
Research firm TrendForce projects global AI server shipments to grow nearly 28% this year compared to the previous year. While this is lower than last year’s 46% increase, AI investment will continue despite concerns over China’s deepseek technology.
Nvidia’s quarterly earnings report on February 25 is expected to forecast full-year revenue of $192.44 billion, far surpassing last year’s $123.52 billion, contributing to the stock price rise.
Apple extended its upward momentum for a third day, buoyed by its AI collaboration with Alibaba and growing expectations for rebounding iPhone sales in China.
Apple shares gained $4.66 (1.97%) to close at $241.53.
Defense Stocks Plummet
The defense sector took a hit.
Although Trump did not specify a timeline, his suggestion that defense spending could be cut in half at some point triggered a sell-off in defense stocks.
Trump stated, “Once things stabilize… I’ll meet with the leaders of China and Russia,” adding that such a scenario would render the nearly $1 trillion in defense spending unnecessary.
He stated that he would propose to Chinese President Xi Jinping and Russian President Vladimir Putin that they cut their defense budgets by half.
Defense stocks reacted sharply to the news.
Lockheed Martin Corporation fell $7.25 (1.64%) to $434.72.
Northrop Grumman dropped $15.80 (3.36%) to $455.06, while General Dynamics slid $5.17 (2.06%) to $246.16.
Oil Prices Slip for the Second Day
Global oil prices declined for a second consecutive session.
However, the drop was reduced by easing concerns over a sharp fall in oil demand after the U.S. postponed reciprocal tariffs until April.
Brent crude, the international benchmark, settled down $0.16 (0.21%) at $75.02 per barrel for April delivery.
U.S. benchmark West Texas Intermediate (WTI) for March delivery closed $0.08 (0.11%) lower at $71.29 per barrel.
WTI dropped as low as $70.22 per barrel during trading due to tariff worries but recovered some ground following Trump’s announcement of the tariff delay.
