US stocks rallied Wednesday after President Trump pulled back on some of his tariffs, raising hopes he may avoid a worst-case trade war that grinds down economies and sends inflation higher.
- The S&P 500 rose 64.48 points, or 1.1%, to 5,842.63. , bouncing back from the sell-off that erased all of its "Trump bump" since Election Day.
- The Dow Jones Industrial Average rose 485.60 points, or 1.1%, to 43,006.59.
- The Nasdaq composite rose 267.57 points, or 1.5%, to 18,552.73.
The market turned higher after Trump said he's
granting a one-month exemption for US automakers on his stiff new tariffs for Mexican and Canadian imports, the
AP reports.
All of the Big Three automakers could have been hurt by such tariffs because of how much production happens across the countries. Trump's announcement sent relief through Wall Street, and Ford's and General Motors' stock both jumped more than 5% to help lead a widespread rally across the market. The worry has been that such tariffs would not only hurt profits for companies but also jack up prices for cars and other bills for US households that are already struggling with still-high inflation. The hope is that Trump is using the threat of tariffs as a tool for negotiation and that he may ultimately institute less painful moves for the economy and global trade if he can win what he wants.
Confidence among US consumers has soured sharply because of expectations for higher inflation because of tariffs. A couple of reports on Wednesday gave a mixed read on the US economy's strength. One suggested US employers pulled back sharply on their hiring last month. The report from ADP could be a warning signal ahead of the more comprehensive jobs report that's coming Friday from the Labor Department. A separate report said growth for US finance, real estate, and other businesses in the services sector is better than economists expected. But businesses also said in the survey they're confronting "chaos" and uncertainty because of tariffs, according to the Institute for Supply Management.
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On Wall Street, Brown-Forman jumped 10.1% after the company behind Jack Daniel's reported stronger profit for the latest quarter than analysts expected. CEO Lawson Whiting also said his company isn't changing its forecasts for upcoming sales, even as "we anticipate continued uncertainty and headwinds in the external environment." Whiting said the decision by Canadian provinces to take US whiskeys off their store shelves is "worse than a tariff because it's literally taking your sales away." But he also said Canada accounted for only 1% of Brown-Forman's total sales. On the losing end of Wall Street was Campbells. The food company fell 2.9% after cutting some of its financial forecasts, citing discouraging trends for its snack products.
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