Wall Street stocks, led by S&P 500 and the Nasdaq, ended higher on Tuesday, as technology stocks rebounded, while investors digested President-elect Donald Trump's tariff pledges on top trade partners and the latest minutes from the Federal Reserve.
U.S. short-term interest-rate futures pared earlier losses after the Fed's latest minutes showed officials appeared divided over how much further they may need to cut interest rates.
The minutes of the Nov. 6-7 meeting also showed the group agreed this was a moment to avoid giving much concrete guidance about how U.S. monetary policy is likely to evolve in the weeks ahead.
"The minutes did nothing to alter my view that the policy rate is going to be adjusted lower next week and will continue to do so through the next calendar year," said Jamie Cox, managing partner for Harris Financial Group.
Other analysts were more cautious.
Paul Ashworth, chief North America economist for Capital Economics, noted that he still expects another 25 basis-point cut, but cautioned such decisions are data-dependent and therefore November's employment and inflation data will be pivotal
In a development overnight, Trump said he would impose a 25 per cent conditional tariff on Canadian and Mexican imports that could violate a free-trade deal he negotiated during his previous term. He also outlined "an additional 10 per cent tariff, above any additional tariffs" on imports from China, raising the risk of trade wars.
Automakers Ford and General Motors both dropped on the news as they have highly integrated supply chains across Mexico, the U.S. and Canada. GM shares plunged nearly 9 per cent.
"The concern is that some products are going to become more costly and that will mean revenue for those companies that are possibly manufacturing those goods overseas is going to decline," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
"It's a lot of back-and-forth right now because investors are trying to position themselves for January and the days after and they're not really sure."
The Dow Jones Industrial Average rose 123.74 points, or 0.28 per cent, to 44,860.31, the S&P 500 gained 34.26 points, or 0.57 per cent, to 6,021.63 and the Nasdaq Composite gained 119.46 points, or 0.63 per cent, to 19,174.30.
Gains in megacaps such as Microsoft and Apple boosted the information technology sector and the tech-heavy Nasdaq. Microsoft shares rose a little over 2 per cent.
Wells Fargo rose 0.6 per cent, standing out among sluggish banking stocks, after Reuters reported, citing sources, that the bank is in the last stages of a process to pass regulatory tests to lift a $1.95 trillion asset cap next year after fixing problems from its scandal over fake accounts.
The blue-chip Dow was weighed down by declines in Amgen , which slid about 4.8 per cent after its experimental obesity drug fell short of expectations.
The S&P 500 touched a record high on Monday and logged its sixth-straight session of gains, while the Russell 2000 also scaled an all-time high after three years. On the day, the small-cap index fell 0.7 per cent.
Among others, Eli Lilly rose 4.6 per cent after U.S. President Joe Biden proposed expanding Medicare and Medicaid coverage for anti-obesity drugs.
Declining issues outnumbered advancers by a 1.57-to-1 ratio on the NYSE. There were 358 new highs and 52 new lows on the NYSE.
The S&P 500 posted 63 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 124 new highs and 91 new lows.
(Reporting by Saeed Azhar in Toronto; Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Maju Samuel and Matthew Lewis)