Stocks staged a strong turnaround on Wednesday, recovering from early losses to close sharply higher.
The rally helped major indices regain some ground after several sessions of steep declines.
The Nasdaq climbed 267.57 points, or 1.5%, to 18,552.73, the S&P 500 rose 64.48 points, or 1.1%, to 5,842.63, and the Dow jumped 485.60 points, or 1.1%, to 43,006.59.
The session’s early weakness was driven by ongoing concerns about the economic impact of President Donald Trump’s new tariffs on Canada, Mexico, and China.
However, stocks rebounded after Bloomberg reported that the administration was considering a one-month delay on tariffs for automakers importing from Mexico and Canada.
The White House later confirmed the exemption, citing discussions between Trump and executives from General Motors, Ford, and Stellantis.
White House Press Secretary Karoline Leavitt also suggested that Trump was open to further tariff exemptions, providing additional relief to the market.
Trump pauses auto tariffs
President Trump decided to grant automakers a one-month exemption from newly imposed tariffs on Mexico and Canada, the White House announced Wednesday.
“We are going to give a one-month exemption on any autos coming through USMCA,” White House Press Secretary Karoline Leavitt said, referring to the trade deal Trump negotiated during his first term.
Reciprocal tariffs will still take effect on April 2, but at the request of companies associated with USMCA, the president is providing a temporary exemption to prevent economic disadvantages, Leavitt added.
The development sent shares of General Motors, Ford, and Stellantis surging on Wednesday.
Tech stocks lead gains
Despite ongoing concerns, the market saw broad-based gains, with more than 70% of S&P 500 stocks closing higher.
The Russell 2000, which tracks small-cap stocks, also advanced about 1%.
Tech giants such as Microsoft and Tesla posted strong rebounds, reversing some of the recent declines that have led the sector lower in recent sessions.
However, uncertainty remains, particularly as Trump’s tariff policies continue to create volatility.
While the automaker tariff delay provided a temporary lift, tensions persisted after Trump criticized Canada’s fentanyl control efforts in a call with Prime Minister Justin Trudeau.
Markets fluctuated throughout the day before rallying on the tariff delay news, highlighting investor sensitivity to policy developments.
Despite Wednesday’s gains, stocks remain under pressure for the week.
All three major indexes are still down more than 1% since Monday, as investors continue to weigh the broader implications of tariffs and potential retaliatory measures from China, Mexico, and Canada.
Economic data do not offer much hope
Earlier in the day, sentiment was dampened by weaker-than-expected private sector job growth.
Payroll processor ADP reported that private employment increased by just 77,000 jobs in February, much below economists’ expectations of 140,000 and well below January’s revised gain of 186,000.
ADP noted that job losses occurred in key sectors, including trade and transportation, health care and education, and information.
Later in the day, the Federal Reserve’s latest Beige Book report indicated that US economic activity has risen slightly but unevenly since mid-January.
While employment has edged higher and prices have increased modestly, businesses and households remain uncertain about the impact of President Donald Trump’s policies on future growth, labor demand, and inflation.
The report, compiled from observations across the Fed’s 12 regional banks, reflected cautious optimism but also growing concerns over tariffs, immigration restrictions, and economic policy shifts.
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