Shares of industrial and transportation companies rose as the odds of blanket tariffs dropped in light of President Donald Trump's inauguration speech and other commentary.

"The road to tariff implementation might be less straightforward than a universal tariff baseline might imply, given the potential for moving targets around scope and scale," said strategists at brokerage Morgan Stanley. Similarly, Goldman Sachs strategists forecast a more measured approach than previously feared. "We continue to expect 1) a roughly 20 percentage-point tariff hike on imports from China (though we lowered our probability from 90% to 70%), and 2) tariffs on EU autos (55% probability)," said the Goldman strategists.

"We see two other proposals as risks: 1) we give a 20% probability to a 25% tariff on Canada and Mexico, and 2) we now give a lower 25% probability to a universal tariff on all countries, and we think if implemented it would most likely only target 'critical imports' (10-20% of total US imports)."

3M shares rose after the maker of Post-it Notes, Scotch tape and other industrial and office supplies posted better-than-expected fourth-quarter earnings and guided for sales in 2025.

Investors have rotated out of U.S. stocks and into eurozone stocks, according to the latest fund-manager survey from Bank of America's global fund manager survey for January shows. Fund managers are still overweight on U.S. stocks but this position dropped to a net 19% from a record net 36% overweight in December. European corporate growth and stock performances have trailed the U.S. for some years, meaning that valuations are more reasonable while currency moves are also working in many international firms' favor, said J.D. Joyce, president of Houston financial advisory Joyce Wealth Management.


Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

01-21-25 1740ET