Traders work on the floor of the New York Stock Exchange (NYSE) on March 5, 2025, in New York City.Spencer Platt/Getty Images
Major North American stock indexes finished higher in choppy trading on Wednesday, as investors cheered the likely easing of trade tensions between the U.S. 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.
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,” said 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 U.S. services sector in February. However, signs of increased input prices tempered optimism.
Separately, ADP data showed U.S. private payrolls increased in February at the slowest pace in seven months. Investors now await Friday’s crucial payrolls report.
Riskier equities in the U.S. 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% after Trump said on Tuesday that lawmakers should get rid of a law offering subsidies to the semiconductor industry.
Stocks in materials, industrials, consumer discretionary and communication services were the main drivers of gains among the 11 sectors on the benchmark S&P 500. Energy and utilities were the biggest losers.
The Dow Jones Industrial Average rose 485.60 points, or 1.14%, to 43,006.59, the S&P 500 gained 64.48 points, or 1.12%, to 5,842.63 and the Nasdaq Composite gained 267.57 points, or 1.46%, to 18,552.73.
The S&P/TSX composite index ended up 298.82 points, or 1.2%, at 24,870.82, after posting on Tuesday its lowest closing level since January 13.
In domestic economic news Wednesday, S&P Global’s Canada services PMI data showed that the downturn in Canada’s services economy deepened in February as firms avoided committing to new business in anticipation of a trade war.
The materials group climbed 3.4% as China’s move to unlock more fiscal stimulus and a proposed 500 billion euro infrastructure fund in Germany contributed to higher copper prices.
The consumer discretionary sector added 2%, helped by gains for auto parts companies. Magna International Inc climbed 6.9% and Linamar Corp ended 4.1% higher.
Technology rose 1.8% and industrials were up 1.2% higher. Shares of business aircraft manufacturer Bombardier Inc jumped nearly 10%.
Energy was the only major sector to lose ground, falling 0.8%, as the price of oil settled 2.9% lower at US$66.31 a barrel.
In other U.S. stocks, CrowdStrike fell 6.3% after the cybersecurity firm forecast first-quarter revenue slightly below estimates.
Huntington Ingalls jumped 12.3% 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 1.99-to-1 ratio on the NYSE. There were 93 new highs and 146 new lows on the NYSE. The S&P 500 posted 3 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 42 new highs and 163 new lows. Total volume across U.S. exchanges was 15.50 billion shares, compared with the 20-day moving average of 15.97 billion shares.
Reuters, Globe staff