By John Towfighi, CNN

New York (CNN) — US stocks closed higher Tuesday after the first full day of Donald Trump’s second presidency, as traders absorbed a blizzard of executive orders that so far point to less aggressive action on trade.

The Dow soared by around 1.2%, or 538 points. The S&P 500 gained 0.9% and the tech-heavy Nasdaq Composite moved higher by 0.6%.

President Trump said in an Oval Office signing ceremony Monday that his administration would levy a 25% tariff on Mexico and Canada starting February 1. He did not mention a tariff on China, one of the US’ biggest trade partners.

Asked Monday at an Oval Office signing ceremony about tariffs on China, Trump noted extensive tariffs he imposed during his first administration were still in effect after former President Joe Biden largely left them in place.

Trump also implied that the US would implement tariffs on China if Beijing did not approve any deal on TikTok, which is facing a ban in the US due to questions about national security and scuttling the First Amendment.

“President Trump’s Inauguration Day policy announcements on tariffs were more benign than expected,” Alec Phillips, chief US political economist at Goldman Sachs, said in a Tuesday note.

The market “seems to have overcome its tariff tantrum,” said Jamie Cox, managing partner at Harris Financial Group, in an email.

Analysts at Morgan Stanley said in a Tuesday note that Trump’s focus on tariffs as early as February 1 is a reminder that “vigilance is warranted” as markets try to keep track of Trump’s flurry of policy decisions.

Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, said in a Tuesday note that her outlook for the economy is “growth despite tariffs.”

“Tariff risks, US fiscal policy concerns and shifting expectations around inflation and Fed policy are likely to keep equity markets volatile in the near term. But we believe it is most likely that a combination of resilient US economic activity, solid earnings growth, lower borrowing costs and the potential for greater capital markets activity will lead stocks higher over the balance of 2025,” Marcelli said.

Marcelli expects the S&P 500 to reach 6,600 by December.

The dollar, which has been gaining in recent months in anticipation of Trump’s second term, edged lower Tuesday after rising on news of Trump’s proposed tariffs.

WTI crude oil, the US benchmark, was down 1.7% Tuesday after Trump announced executive orders focused on reversing regulations and enabling the drilling of oil in the US.

The yield on the 10-year Treasury note fell, boding well for stocks.

The Russell 2000 index, which tracks smaller companies, gained 1.85%.

Investors also rallied on news that OpenAI CEO Sam Altman is set to appear at the White House Tuesday afternoon to meet with President Donald Trump and other tech CEOs to announce an enormous private sector investment in artificial intelligence infrastructure in the US. Oracle (ORCL) surged about 7% on news it is set to partner with OpenAI and Softbank for the investment.

Trump inherits a strong stock market

From Trump’s election in November until inauguration day, the S&P 500 gained almost 4%, according to Sam Stovall, chief investment strategist at CFRA Research. That was the 11th best performance since 1944 during the “post-election honeymoon period,” he wrote in a note.

Positive performance during that period has been a signal for gains during both the first 100 days of the presidency and the entire year almost 80% of the time, according to Stovall.

Investors will be keen to see whether the good times can keep rolling under the Trump administration.

Markets have already adjusted to expectations of a business-friendly Trump administration, said Clark Geranen, chief market strategist at CalBay Investments, in an email.

“While Tuesday is the first trading session under Trump 2.0, markets are forward looking, and much of the optimism over the potential for tax cuts and deregulation is already priced in, via the post-election stock market surge, which stocks have held onto for the most part,” Geranen said.

Geranen said he expects volatility in the market as investors react to news of Trump’s poli?cy decisions, though January will be crucial for getting a sense of how the year might look for markets.

“January’s performance tends to portend, at least historically, the market’s performance for the full year,” Geranen said. “The next 10 days will be important for markets.”

Easing fear was the sentiment driving the market Tuesday, according to CNN’s Fear and Greed Index, and has been improving since January 15, when inflation data came in cooler than expected.

The VIX, Wall Street’s fear gauge, fell 6%.

Charles Schwab (SCHW) stock surged early Tuesday and was up almost 6% after the brokerage giant reported earnings that exceeded expectations. Charles Schwab posted $5.3 billion in revenue in the fourth quarter of 2024, up 20% from the same period a year earlier.

Apple (AAPL) stock fell more than 3% after it was downgraded by analysts.

Netflix (NFLX) is expected to report fourth-quarter earnings Tuesday after the bell.

Bitcoin was trading around $106,000 on Tuesday afternoon after surging to a record high above $109,00 on Monday. Mark Uyeda, the acting chairman of the Securities and Exchanges Commission, announced on Tuesday the formation of an SEC “crypto task force” focused on reviewing the regulation of cryptocurrencies.

Trump did not mention bitcoin during his inaugural address and did not issue any executive actions related to crypto on Monday. Trump and his wife, First Lady Melania Trump, each released their own meme coins over the weekend.

Wall Street was closed Monday in observance of Martin Luther King Jr. Day.

This is a developing story and will be updated.

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CNN’s Kayla Tausche, Kevin Liptak, Clare Duffy, Matt Egan and David Goldman contributed reporting.