Wall Street’s main indexes finished higher in choppy trading on Wednesday, as investors cheered the likely easing of trade tensions between the US and major trading partners.
Stocks turned positive after a report said President Donald Trump was considering a one-month delay of auto tariffs on Canada and Mexico. Equities extended gains after a White House announcement confirmed that Trump agreed to delay tariffs on some vehicles.
The Dow Jones Industrial Average jumped 485.60 points, or 1.1%, to close at 43,006.59
The S&P 500 gained 1.1%, and the Nasdaq climbed 1.5%. Earlier, Wall Street had lost ground following mixed economic data and as investors also worried about a trade war.
“We are on the tariff roller coaster,” Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. “The economic data, the Fed, and all that stuff seems to have been pushed to the background for now. It’s just a reminder how these policies have an impact in the long run and the markets are reacting to it.”
Early in the session, an ISM report showed an unexpected rise in growth in the services sector in February. However, signs of increased input prices tempered optimism.
Separately, ADP data showed private payrolls increased in February at the slowest pace in seven months. Investors now await Friday’s crucial payrolls report.
Riskier equities have sold off over the past few weeks as investors worried Trump’s trade policies would amplify inflation pressures, slow the economy and eat into corporate profits. Multiple reports have suggested a cooling economy.
“The long-term trend that we were in, which is the rally from the pandemic lows, has basically tapped out and on top of that you put Trump, whose policies — whether it’s tariffs, deportations or the extension of the 2017 tax cut – are all going to hurt the economy or cause inflation,” said Bill Strazzullo, chief market strategist at Bell Curve Trading in Boston.
Carmaker stocks rose, with Ford up 5.8% and General Motors up 7.2%. Tesla gained 2.6%.
Chipmaker Intel dropped 2.4% following Trump’s remarks that lawmakers should get rid of a law offering subsidies to the semiconductor industry.
CrowdStrike fell 6.3% after the cybersecurity firm forecast first-quarter revenue slightly below estimates.
Huntington Ingalls rose 12% after Trump said his administration will create an office of shipbuilding in the White House and offer tax incentives.
