NEW YORK: Wall Street’s main indexes rose in choppy trading on Wednesday, as investors hoped for a delay in US auto tariffs on its top trading partners.
At 12:24 p.m. ET, the Dow Jones Industrial Average rose 170.65 points, or 0.40%, to 42,691.64, the S&P 500 gained 12.80 points, or 0.22%, to 5,790.95 and the Nasdaq Composite climbed 67.83 points, or 0.37%, to 18,352.99.
The main indexes turned positive after a report said the US administration was considering a one-month delay of auto tariffs on Canada and Mexico.
Carmakers Ford rose 3.5% and General Motors added 5%. Tesla gained marginally.
Uncertainty around tariffs pressured the markets despite Commerce Secretary Howard Lutnick’s comment that Trump was considering granting some relief on import of items such as cars and autoparts, that comply with the US-Mexico-Canada free-trade agreement.
The remarks came after Trump escalated a global trade war on Tuesday as he imposed 25% tariffs on top trade partners, Canada and Mexico.
The tariff announcement is expected later in the day.
“Everybody’s hoping that the tariffs that have been implemented are just a negotiation tactic, but the longer they go on, the more they are going to pressure the overall economy and raise prices,” said Robert pavlik, senior portfolio manager at Dakota Wealth.
An ISM report earlier on Wednesday 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 at the slowest pace in seven months in February, ahead of Friday’s crucial payrolls report.
Yields on short-term Treasury bonds rose following the data, further pressuring equities. Traders now see the central bank lowering borrowing costs by at least thrice by 25 basis points by December, according to data compiled by LSEG.
The US Federal Reserve is also slated to unveil its beige book at 2:00 p.m. ET.
Investors have sold riskier equities over the past few weeks on fears that Trump’s trade policies would amplify inflation pressures, slow the economy and eat into corporate profits, at a time when multiple reports have suggested a cooling economy.
Energy stocks fell 3.3% and led declines among the top 11 sectors of the S&P 500, as crude prices declined.
The benchmark S&P 500 has fallen about 6% from its record high, while the tech-heavy Nasdaq has dropped over 10% from its December 16 peak and was on track to confirm a correction.
Chipmaker Intel dropped 4.4% following Trump’s remarks that lawmakers should get rid of a law offering subsidies to the semiconductor industry.
CrowdStrike fell 8.5% after the cybersecurity firm forecast first-quarter revenue slightly below estimates.
Huntington Ingalls rose 11.3% after Trump said his administration will create an office of shipbuilding in the White House and offer tax incentives.
Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P 500 posted one new 52-week high and 8 new lows, while the Nasdaq Composite recorded 30 new highs and 138 new lows.
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