U.S. and Canadian stock indexes finished higher after a choppy trading session on Wednesday, falling early and then rebounding as investors made last-minute bets to position themselves ahead of U.S. President Donald Trump’s sweeping tariff announcements.
Trump began speaking after Wall Street closed, and both S&P 500 futures and Nasdaq futures reversed gains as investors blanched at his sweeping tariff plans. S&P 500 futures were 1.6% lower as he spoke, with Nasdaq futures down 2.4%.
This suggested investors expect deep losses when Wall Street opens on Thursday.
Trump’s sweeping orders included imposing a 10% baseline tariff on imports to the U.S. and higher duties on some of the country’s biggest trading partners. But the U.S. will exempt some elements of North American trade from the 10-per-cent baseline tariff that will take effect Wednesday night.
“Markets were anticipating a good, bad or an ugly scenario on tariffs and this reciprocal tariff is leaning more into the ugly scenario, meaning that the total amount of tariff when you average out is slightly higher than what was anticipated,” said Brian Mulberry, portfolio manager at Zacks Investment Management.
The Canadian dollar swung wildly up and down during Trump’s presentation, but was firmly higher as reports emerged that Canada won’t face additional tariffs for the time being. The loonie was trading by early evening at 70.20 cents US, up about a third of a cent from prior to the Rose Garden announcement.
Bond yields fell in the post market, with the U.S. two-year yield declining to 3.834%, the lowest since March 11. That reflected traders boosting bets that the Federal Reserve will start cutting interest rates in June and deliver a total of three quarter-point reductions to the policy rate by October, as tariffs act as a drag on the economy. Short-term interest-rate futures reflect about a 70% chance of a Fed rate cut when the U.S central bank meets in June, up from about 60% before the tariffs were announced.
Volatility has gripped markets in recent weeks as investors speculated about the scope of tariffs and their impact on the global economy, inflation and corporate earnings. Some tariffs, including on steel, aluminum and autos, had already been announced, although Trump unveiled the specifics of his tariff policy during the Tuesday ceremony.
Before Trump began speaking, the Dow Jones Industrial Average rose 235.36 points, or 0.56%, to close at 42,225.32, the S&P 500 gained 37.90 points, or 0.67%, to 5,670.97, and the Nasdaq Composite climbed 151.16 points, or 0.87%, to 17,601.05.
The S&P/TSX composite index ended up 273.90 points, or 1.1%, at 25,307.18, its third straight day of gains and its highest closing level since March 25.
“We are heading into a very, uncertain period and it is going to be a rough ride ... this is a day where people should be already positioned in what they consider to be safer havens,” said Michael Sprung, president at Sprung Investment Management.
The TSX technology sector added 2.5%, with electronics equipment firm Celestica Inc up 4.3%. Industrials rose 1.5% as railroad shares advanced and heavily weighted financials were up 1.1%. Energy added 0.7% as the price of oil settled 0.7% higher at $71.71 a barrel.
Communication services added to its recent declines, weighed by a 4.3% decline for the shares of BCE Inc.
Shares of BlackBerry Ltd ended 9.2% lower after the cybersecurity company forecast a decline in annual revenue.
Meanwhile, big-tech names offered support to the U.S. benchmarks on Wednesday.
Tesla jumped 5.3% after Politico reported that Trump has told members of his Cabinet and other close contacts that his billionaire ally Elon Musk, CEO of the electric vehicle maker, will soon step back from his government role.
This helped reverse earlier declines triggered when Tesla reported a 13% drop in first-quarter deliveries.
Its advance helped the consumer discretionary index, which rose 2%, the best performing of the 11 S&P sectors. Tesla fell during Trump’s speech after the bell.
Among other Magnificent Seven names, Amazon.com closed 2% higher after it was reported the company was bidding for short video platform TikTok.
On the data front, U.S. private payrolls growth accelerated in March and new orders for U.S.-manufactured goods increased solidly in February, likely as businesses front-loaded orders ahead of tariffs.
Focus will now switch to the crucial monthly non-farm payrolls data as well as Federal Reserve Chair Jerome Powell’s speech on Friday for insights into the health of the U.S. economy and trajectory of interest rates. Canada also releases its latest monthly job figures on Friday.
Among the newest public companies, CoreWeave continued its recovery from a rocky first two trading days, with the artificial intelligence startup building on the previous session’s gains with a 16.7% advance.
However, conservative news provider Newsmax, which had posted triple-digit percentage gains on its first two days, retreated significantly, slumping 77.5% on the day.
Reuters, Globe staff