4:12pm: Auto tariff delay welcomed
Wall Street welcomed the one-month delay of tariffs impacting the auto industry, sending the three major indexes higher during Wednesday’s session.
The Nasdaq led the gains, adding 1.5% at 18,552 points. The Dow Jones added 1.1% at 43,006 points and the S&P 500 was up 1.1% at 5,842 points.
Oil prices fell to the lowest level in six months amid economic uncertainty and rising supply, with OPEC+ planning to increase production starting in April. West Texas Intermediate (WTI) crude oil and Brent crude both slipped below $70 per barrel.
1:55pm: Trump, Trudeau discuss trade as White House delays auto tariffs
President Donald Trump and Canadian Prime Minister Justin Trudeau spoke on Wednesday amid ongoing trade tensions following Trump's new tariffs on Canada and Trudeau’s retaliatory measures.
The 50-minute call, confirmed by both governments, included discussions on trade and fentanyl. Trump later commented on Truth Social, criticizing Trudeau's border policies and suggesting he was using the issue for political gain.
“Justin Trudeau, of Canada, called me to ask what could be done about Tariffs. I told him that many people have died from Fentanyl that came through the Borders of Canada and Mexico, and nothing has convinced me that it has stopped," Trump wrote.
"He said that it’s gotten better, but I said, ‘That’s not good enough,’” he wrote. “The call ended in a “somewhat” friendly manner! He was unable to tell me when the Canadian Election is taking place, which made me curious, like, what’s going on here? I then realized he is trying to use this issue to stay in power. Good luck Justin!”
Meanwhile, the White House announced a one-month exemption from auto tariffs for Stellantis, Ford, and General Motors under USMCA, with full tariffs resuming April 2.
US Commerce Secretary Howard Lutnick defended the delay, describing Trump's tariff strategy as “a pounding forward move” rather than a retreat.
12:42pm: Oil slumps
US stocks moved higher in the early afternoon as investors welcomed potential relief from Trump’s tariffs.
The Trump administration is reportedly considering exemptions for certain sectors, particularly the automotive industry, as part of a potential compromise with Canada and Mexico. Relief might be offered to industries that comply with the terms of the US-Mexico-Canada Agreement (USMCA), which was negotiated during Trump's first term.
The Nasdaq added 0.7% at 18,403 points, the Dow Jones gained 0.6% at 42,782 points and the S&P 500 added 0.5% at 5,805 points.
Oil prices, meanwhile, fell on higher supply and weaker demand concerns.
“OPEC+’s decision to throw open the taps, and fears of a broader downturn in demand thanks to tariffs, have knocked crude oil prices to their lowest level in five months,” IG chief market analyst Chris Beauchamp said.
“Weak demand should have caused the cartel to stay its hand, but geopolitics have come into play, with the move motivated largely by a need to appease the combative US president. More production increases are likely, though a total unwinding of 2022 production cuts is unlikely.”
10:55am: Hiring slows
The private sector added 77,000 jobs in February, the ADP jobs report released on Wednesday showed, far below economists’ estimates of about 140,000.
This marked a substantial decline from the revised figure of 186,000 jobs added in January.
The lower-than-expected job growth raised concerns about a potential economic slowdown and was attributed to policy uncertainties and a decrease in consumer spending.
XTB research director Kathleen Brooks said the report is another disappointing US economic data point.
“This has added to the recent run of bad economic data in the US. It now looks like the US economy peaked in the middle of Q4 and has been trending lower since then,” Brooks said.
The weak ADP report heaps pressure on the US non-farm payrolls (NFP) report for February due on Friday, Brooks added.
“The market is expecting a reading of 160,000, a slight uptick from January, but still well below the 2024 average monthly rate,” Brooks said.
“While ADP and NFP reports do not have a particularly strong positive correlation, the weakness in the private sector survey could send a chill down the spines of US bulls.
9.48am: Stocks gain at open
Wall Street got off to a better start on Wednesday as traders appeared optimistic on the prospect of deals between the US and its partners to water down tariffs.
Having been introduced on Tuesday, US Commerce Secretary Howard Lutnick signalled further announcements on scaling back the tariffs could be made on Wednesday.
The Dow Jones opened 0.4% higher in a slight reverse on Tuesday’s sharp drop as a result, while the S&P 500 added 0.2% and Nasdaq moved 0.4% higher.
“Investors are looking for any signs that Trump is open to deals rather than doling out tariffs and refusing to listen,” AJ Bell analyst Russ Mould commented.
“Markets would take even the slightest rollback from Trump as a positive sign, helping to settle nerves following concerns about a full-blown trade war.”
7.27am: Better start expected
Wall Street looked on course for a positive start after a volatile session on Tuesday which saw stocks sink, partially recover but then tumble again as Trump’s tariffs came into force.
Futures had the Nasdaq, which posted a relatively shallow 0.4% drop against its counterparts on Tuesday, up 0.6% ahead of Wednesday’s opening bell.
The Dow Jones and S&P 500, which dropped 1.6% and 1.2% respectively, were both seen 0.4% higher in the meantime.
Donald Trump’s sweeping tariffs against Canada, Mexico and China had been introduced on Tuesday, sparking abrupt retaliation and stoking fears over US growth ahead.
Optimism appeared to seep through on Wednesday though, after US Commerce Secretary Howard Lutnick signalled deals could see tariffs potentially watered down.
“Both the Canadians and Mexicans were on the phone with me all day,” he said Wednesday evening.
“I think [Trump's] going to figure out, 'you do more, and I'll meet you in the middle some way.' And we're probably going to be announcing that tomorrow.”