Wall Street bounced back Wednesday from consecutive bad days on news that President Donald Trump is pausing the potentially devastating automobile tariffs against Canada and Mexico.
The Dow Jones Industrial Average rose 485.60 points, up 1.14% to 43,006.59 points, after losing more than 1,300 points the previous two days. The Nasdaq Composite climbed 1.46% and the S&P gained 1.14% to also end losing streaks.
The roller-coaster week was the result of Trump's 25% tariffs against neighboring Canada and Mexico, sparking a selloff on Monday and Tuesday that was prompted by growing fears over the impact of Trump's policy on the U.S. economy.
Trump agreed Wednesday to a one-month pause on the tariffs against automobile makers, including Stellantis, General Motors and Ford. Stellantis' stock climbed 9.24%, GM's rose 7.22%, and Ford's gained 5.75%.
"We spoke with the Big Three auto dealers. We are going to give a one-month exemption on any autos coming through USMCA (the US, Mexico and Canada trade agreement)," Trump said in a statement, through White House press secretary Karoline Leavitt.
"Reciprocal tariffs will still go into effect on April 2. But at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they're not at an economic disadvantage."
Those comments gave traders hope that the tariff can be avoided and confidence that the new administration is open to responding to market pressures. But the uncertainty over the tariffs and the reaction of the inflation-fatigued economy remain to be seen.
