The S&P 500 rose on Wednesday, staging a recovery rally after back-to-back losses amid ongoing uncertainties tied to President Donald Trump’s controversial tariffs.
The S&P 500 and Nasdaq Compositeadded 0.7% and 1%, respectively. The Dow Jones Industrial Averagerebounded by 3335 points, or 0.8%, after plunging more than 1,300 points over the last two sessions.
The three indexes swung between positive and negative territory for the day. If the averages end down, it would mark the third straight negative session for each.
Commerce Secretary Howard Lutnick said that he expected an announcement on an agreement with Canada and Mexico around tariffs on Wednesday. Lutnick added that Trump was considering which sectors of the economy to give relief to on the taxes.
Those updates boosted stocks like automakers that were hard hit due to concerns about rising costs for materials. General Motors and Ford advanced more than 3% and 2%, respectively.
To be sure, Trump’s tariffs — and subsequent announcements of retaliatory plans from China, Mexico and Canada — have rocked markets. Though traders’ hoped for official resolutions, Trump said a “little disturbance” from his levies slapped on key trading partners was OK during a Tuesday night address to Congress. Even with Wednesday’s respite, the three major indexes are all down more than 2% on the week.
What’s more, the S&P 500 on Tuesday officially wiped out its gains since it closed on Election Day in November. The Nasdaq Composite sat within striking distance of correction territory at points during Wednesday’s session.
Elsewhere, a reading on the health of the service sector released Wednesday morning came in slightly better than economists expected, briefly boosting the market. But the ADP private payroll reportreleased earlier in the day showed less job growth than anticipated, adding yet another data point to the growing body of evidence indicating the economy was cooling.
“The tariffs alone aren’t enough to hurt the economy in a noticeable way,” said Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management. “But when you take tariffs, plus broader worries about the economy, and a Fed that still might take its time on lowering rates, that’s when you start to wonder if the record highs in stocks from earlier this year were justified.”
