Global markets showed resilience on Tuesday, with the S&P 500 and Dow Jones Industrial Average reaching fresh record highs despite heightened trade tensions. Investors appeared unfazed by President-elect Donald Trump’s proposed tariffs on Mexico, Canada, and China, which sparked initial volatility. The broader sentiment remained resilient, supported by optimism around a robust US economy and dovish Federal Reserve minutes hinting at gradual rate adjustments. While some sectors like autos and consumer goods faced sharp declines amid trade war fears, gains in energy, technology, and financial stocks helped the indices recover, reflecting market confidence in the face of geopolitical and economic uncertainties.

Key Takeaways:

  • S&P 500 and Dow Close at Record Highs: The S&P 500 rose 0.6%, reaching a new intraday high before closing at a record, while the Dow Jones Industrial Average climbed 135 points, or 0.3%, to set a fresh all-time closing high. Despite lingering concerns over President-elect Donald Trump’s tariff proposals, investors appeared optimistic, focusing on broader economic strength and supportive signals from the Federal Reserve.
  • Nasdaq Gains Amid Broader Market Optimism: The Nasdaq Composite advanced 0.6%, bolstered by strength in technology stocks and renewed investor confidence following Trump’s Treasury secretary pick. Gains across major indices highlighted resilience in market sentiment despite uncertainty surrounding proposed trade policies.
  • Autos and Consumer Goods Hit Hard by Tariff Fears: Automakers took a hit on tariff-related concerns, with General Motors plummeting over 8% and Ford declining more than 2%. The sector struggled as investors weighed the impact of proposed 25% tariffs on goods from Mexico and Canada, as well as additional levies on imports from China. Constellation Brands, a major producer of Mexican beer brands, fell more than 3% in response to the heightened trade tensions.
  • European Markets Decline as Trade Concerns Escalate: European equities closed lower on Tuesday, with the Stoxx 600 falling 0.5% as autos stocks dropped 1.7% on fears of a trade war. Germany’s DAX Index slid 0.56% (109 points), and France’s CAC 40 dropped 0.9% to 7,195, while the FTSE 100 declined 33.07 points, or 0.40%, to 8,258.61. Positive moves in media and household goods sectors, both up 0.3%, were not enough to offset the broader market weakness driven by tariff concerns.
  • Asia-Pacific Markets See Mixed Results: Asia-Pacific indices offered a mixed picture, with Japan’s Nikkei 225 down 0.87% to 38,442 and the Topix Index falling 0.96% to 2,689.55. Australia’s S&P/ASX 200 slid 0.69% to close at 8,359.4 after Monday’s record highs. However, China’s CSI 300 edged up 0.21% to 3,840.18, and Hong Kong’s Hang Seng Index added 0.05% late in the session. Meanwhile, South Korea’s Kospi declined 0.55% to 2,520, reflecting persistent caution across the region.
  • Oil Prices Fall Amid Ceasefire Developments: Oil markets softened on Tuesday, with Brent crude dropping 36 cents (0.49%) to $72.65 per barrel and US West Texas Intermediate crude slipping 30 cents (0.45%) to $68.64 per barrel. Reports of an Israel-Lebanon ceasefire agreement reduced oil’s geopolitical risk premium, while traders remained cautious about future demand and supply balances.

FX Today:

  • EUR/USD Struggles Amid Persistent Selling Pressure: The EUR/USD pair faced continued downward pressure on Tuesday, consolidating near the 1.0470 level. Persistent bearish momentum kept the pair below its 50-period and 100-period SMAs, both sloping downward, signaling a dominant downtrend. The 200-period SMA near 1.0620 has acted as a formidable resistance, preventing any significant recovery. Immediate support lies at 1.0450, and a decisive break below this level could open the path for further declines toward the psychological and technical level of 1.0350. Conversely, any recovery would need to breach 1.0520 for relief, with a broader recovery requiring a move above 1.0620.
  • GBP/USD Consolidates Amid Bearish Momentum: GBP/USD traded near the 1.2550 mark on Tuesday, finding temporary support around 1.2520. However, the pair’s upside moves were capped by the 200-period SMA at 1.2618. Both the 50-period and 100-period SMAs sloping downward confirmed a prevailing bearish trend. Immediate support lies at 1.2520, with a break below this level likely to lead the pair toward 1.2450 and 1.2400. For a reversal, GBP/USD would need to clear the 200-period SMA at 1.2618, with additional resistance seen at 1.2700 and 1.2800. However, the bearish outlook remains dominant unless a significant breakout occurs.
  • USD/CAD Retains Bullish Momentum Despite Consolidation Signs: USD/CAD held firm near the 1.4060 mark, maintaining its bullish momentum established since mid-2024. The pair remains well-supported above its 50, 100, and 200-period SMAs, all trending upward. Resistance near 1.4150 continues to cap gains, but a breakout above this level could extend the rally toward 1.4200, a critical psychological barrier. However, short-term signs of overextension suggest a possible pullback toward 1.4000 or 1.3900, with the 200-period SMA providing strong support.
  • Mexican Peso Weakens as Tariff Threats Weigh: The Mexican Peso tumbled against the US dollar on Tuesday, with USD/MXN climbing to 20.67, marking nearly a 2% gain. Following President-elect Donald Trump’s remarks on imposing 25% tariffs on Mexican goods, the pair surged to an intraday high of 20.74 before slightly retreating. Despite the pullback, the Peso remained under pressure, with the pair approaching the day’s peak of 20.76. A clear break above this level could expose the year-to-date high of 20.80, followed by the psychological resistance at 21.00. On the downside, support lies at 20.50, with further declines potentially testing 20.22 and the critical 20.00 level.
  • Gold Holds Steady Amid Mixed Sentiment: Gold consolidated near $2,630 on Tuesday, holding just above its 200-period SMA at $2,647 while facing resistance near $2,680. The metal struggled to find clear direction, with a stronger US dollar and rising Treasury yields limiting upside momentum. However, concerns about global economic uncertainty provided support for the precious metal. A break above $2,680 could signal renewed bullish momentum, targeting $2,720 and possibly higher levels. On the downside, a breach below $2,647 may expose gold to losses toward $2,580, a critical support zone.

Market Movers:

  • NRG Energy Surges on Upgrade: NRG Energy (NRG) closed up over 10%, leading gains in the S&P 500, after receiving an upgrade from Jeffries to a “Buy” rating with a price target of $113. The stock’s strong performance reflected growing optimism about the company’s prospects following the favorable analyst assessment.
  • JM Smucker Rises on Strong Earnings: JM Smucker (SJM) climbed more than 5% after reporting second-quarter adjusted earnings per share (EPS) of $2.75, exceeding the consensus estimate of $2.51. The company also raised its full-year adjusted EPS forecast to a range of $9.70 to $10.10, compared to its prior guidance of $9.60 to $10.00.
  • Semtech Soars After Earnings Beat: Semtech (SMTC) jumped over 18% following the release of better-than-expected third-quarter results. The company reported adjusted EPS of 26 cents, surpassing analysts’ expectations of 23 cents. Semtech further raised its fourth-quarter guidance, forecasting adjusted EPS between 29 cents and 35 cents, above the consensus estimate of 27 cents.
  • Woodward Gains on Strong Revenue Forecast: Woodward (WWD) rose more than 5% after reporting fourth-quarter net sales of $854.5 million, beating the consensus forecast of $811.2 million. The company also provided an optimistic outlook for fiscal 2025, projecting net sales in the range of $3.30 billion to $3.50 billion, with the midpoint above analysts’ expectations of $3.38 billion.
  • Kohl’s Plummets on Disappointing Q3 Results: Kohl’s (KSS) plunged more than 16% after posting weaker-than-expected third-quarter net sales of $3.51 billion, missing analysts’ estimates of $3.67 billion. The company further cut its full-year comparable sales guidance to a range of -6% to -7%, down from its prior forecast of -3% to -5%.

As Tuesday’s session concluded, markets displayed a mix of optimism and caution, with the S&P 500 and Dow Jones reaching record highs despite looming trade tensions. While proposed tariff hikes from President-elect Donald Trump weighed heavily on specific sectors like autos and consumer goods, broad market resilience was evident as gains in technology and energy offset the losses. European markets struggled to find footing amid fears of a global trade war, while Asia-Pacific indices reflected mixed sentiment, with Japan leading regional declines. Gold consolidated near key levels as investors remained cautious ahead of key US economic data, and oil prices softened following reports of an Israel-Lebanon ceasefire agreement. With light trading volumes expected for the rest of the week due to the Thanksgiving holiday, investors will turn their focus to upcoming data releases and geopolitical developments that could shape market direction in the weeks ahead.