Dow closes at record high, defying fears of panic sparked by Trump's tariff threat

The Dow Jones Industrial Average closed at a record high on Tuesday, achieving the milestone less than 24 hours after a tariff pledge from President-elect Donald Trump sparked fears of a panic in the stock market.

The S&P 500 also closed at a record high, surging about 0.55% on Tuesday to end the day at 6,021.63. The Dow ticked up about 0.25% during the day's trading, closing at 44,860.31.

The tech-heavy Nasdaq advanced about 0.60%, ending the trading session at 19,174.30.

Trading began on Tuesday hours after Trump announced plans to slap tariffs on Canada, China and Mexico by executive order on the first day of his administration.

Trump late Monday said he would charge Mexico and Canada with a 25% tariff on all products coming into the United States until action is taken by those countries to stem illegal immigration and the overflow of drugs across the border.

For China, Trump said that he'd impose an additional 10% tariff on products coming to the U.S.

Economists widely forecast that tariffs of this magnitude would increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers.

Trump's tariffs would cost the average U.S. household about $2,600 per year, according to an estimate from the Peterson Institute for International Economics.

The major indexes were bolstered by steady performance among some major firms.

Apple -- which assembles many of its products in China but enjoyed key tariff exemptions during Trump's first term -- ticked up 0.12% on Tuesday. While Nvidia, the AI chipmaker that imports most of its semiconductors from Taiwan, rose 0.66% during the trading session.

Tesla, the electric vehicle company led by Trump-ally Elon Musk, has a manufacturing plant in Shanghai, China. Shares of the EV maker ticked down 0.11% on Tuesday.

ABC News' Lalee Ibssa , Kelsey Walsh, and Soo Rin Kim contributed to this report.