NEW YORK - US stock indices pushed to fresh records on Tuesday, shrugging off tariff threats from President-elect Donald Trump while European equities retreated.
Trump, who doesn't take office until January 20, made his threat in social media posts Monday night, announcing huge import tariffs against neighbours Canada and Mexico and also rival China if they do not stop illegal immigration and drug smuggling.
Both the Dow and S&P 500 notched all-time highs, with investors regarding the incoming president's words as a bargaining chip.
"In theory, higher tariffs should not be good news for stocks. But, you know, I think the market's chosen to think of (it) as a negotiating tactic," said Steve Sosnick of Interactive Brokers.
"You have bullish sentiment," said LBBW's Karl Haeling. "People are tending to look at things as positively as possible."
But General Motors, which imports autos from Mexico to the United States, slumped 9.0 percent, while rival Ford dropped 2.6 percent.
Overseas bourses were also buffeted by the news. European stocks followed losses in Asia, despite Trump excluding Europe as an immediate target for tariffs.
"These are his first direct comments on tariffs and tariff levels since becoming president-elect, and they have roiled markets," said Kathleen Brooks, research director at XTB trading group, ahead of the Wall Street open.
"It is early days, and there are plenty of opportunities for Trump to direct his attention to Europe down the line," Brooks added.
The US dollar rallied against its Canadian equivalent, China's yuan and Mexico's peso, which hit its lowest level since August 2022.