US STOCKS-Wall St hits one-week high after report of selective Trump tariffs

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Updates to mid-session trading

By Sruthi Shankar and Johann M Cherian

Jan 6 (Reuters) - Wall Street's main indexes rose on Monday to one-week highs as optimism around AI boosted semiconductor stocks, and a report suggested the incoming Trump administration could adopt a less aggressive stance on tariffs than previously anticipated.

At 12:03 p.m. ET, the Dow Jones Industrial Average .DJI rose 353.08 points, or 0.83%, to 43,085.21, the S&P 500 .SPX gained 74.43 points, or 1.25%, to 6,016.90 and the Nasdaq Composite .IXIC gained 343.99 points, or 1.75%, to 19,965.67.

Automakers rose, with Ford F.N up 1.6% and General Motors GM.N gaining 4% after a report said President-elect Donald Trump's incoming administration is currently focused on imposing universal tariffs, but only on certain sectors deemed critical to national or economic security. However, Trump later refuted the report.

Automobile manufacturers are considered the most vulnerable to tariffs imposed on trade partners of the U.S., given their vast supply chains.

In the lead-up to Trump's inauguration on Jan. 20, investors are seeking insights into his policies, which are broadly seen as beneficial for corporate America as well as the U.S. economy.

The Russell 2000 index .RUT, tracking domestically focused small-cap companies, rose 0.9%.

"If we've learned anything over the years, it's that Trump is unpredictable. He loves shaking up markets, but the final outcomes are often less dramatic than his initial announcements," ING analysts led by Chris Turner said in a note.

"However, officials and companies shouldn't get too comfortable. We will only know what's truly happening once it's done."

Eight out of the 11 S&P 500 sectors advanced with tech stocks .SPLRCT leading gains, up 2%.

Chipmakers got a boost from Microsoft's MSFT.O plan to invest $80 billion to develop artificial-intelligence-enabled data centers, as well as Foxconn's 2317.TW forecast-beating fourth-quarter revenue.

Nvidia NVDA.O gained 4.5%, Advanced Micro Devices AMD.O added 3.7% and Micron Technology MU.O climbed 11.6%. The Philadelphia SE Semiconductor index .SOX jumped 3.7% to hit a two-month high.

U.S. stocks rebounded sharply on Friday after a string of losses in December and the first few sessions of the new year, when concerns about high valuations, rising Treasury yields and thin liquidity saw traders pull back after a strong 2024 run.

In a week packed with economic data and speeches from U.S. Federal Reserve officials, investors will look for clues on the pace of monetary policy easing this year. Later in the week, the focus will be on a key monthly payrolls report.

While Trump's proposals could boost corporate profits and energize the economy, they also run the risk of placing upward pressure on inflation. Fed Governor Lisa Cook was the latest among a number of policymakers to caution that inflation risks remain in the new year.

Citigroup C.N added 3.8% after a bullish rating from Barclays. An index tracking banks .SPXBK rose 1.7%. Fed Vice Chair for Supervision Michael Barr, who has sought a range of strict rules on the nation's biggest banks, said he'll resign.

Markets will be shut on Thursday, Jan. 9, on account of a national day of mourning to mark the death of former President Jimmy Carter.

Advancing issues outnumbered decliners by a 1.84-to-1 ratio on the NYSE and by a 1.92-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and five new lows, while the Nasdaq Composite recorded 86 new highs and 21 new lows.

(Reporting by Sruthi Shankar, Johann M Cherian and Pranav Kashyap and Sukriti Gupta in Bengaluru; Editing by Pooja Desai and Maju Samuel)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))