US stocks have hit record highs despite United States President-elect Donald Trump’s pledge to impose sweeping tariffs that threaten to upend international trade.

The S&P 500, which measures the performance of 500 of the biggest US firms, rose 0.57 percent on Tuesday to top its previous high set on November 11.

The tech-heavy Nasdaq Composite climbed even higher, gaining 0.63 percent.

The Dow Jones Industrial Average, which tracks 30 large companies including Microsoft, McDonald’s and Goldman Sachs, rose 0.3 percent.

Some big-name individual stocks fell, including General Motors and Ford Motor, both of which import vehicles from Mexico, a target of Trump’s tariff threats.

Trump’s announcement on Monday that he would impose a 25 percent tariff on all goods from Mexico and Canada and an “additional” 10 percent tariff on Chinese products rattled international markets, dragging down Asian and European equities.

Stock exchanges in Tokyo, Shanghai, Sydney, London, Paris and Frankfurt all closed lower on Tuesday, while currencies including the Canadian dollar, Mexican peso, Chinese yuan and the euro fell against the US dollar.

While Trump has repeatedly flagged his intention to impose sweeping tariffs on imports to the US, investors are weighing whether the Republican intends to follow through on his threats or is seeking a bargaining chip in negotiations with other countries.

Economists have warned that Trump’s proposals for broad-based tariffs would raise the cost of everyday items in the US and drag down global growth.

Trump’s supporters argue that tariffs will bring back manufacturing jobs from overseas as well as give Washington a stronger hand to negotiate more favourable trade deals with other countries.