Trump’s exemption on auto tariffs boosts US stocksUS stocks rallied Wednesday after the Trump administration announced a one-month exemption on auto tariffs for Canada and Mexico. The move eased investor concerns about a global trade war. The Dow Jones Industrial Average jumped 486 points, or 1.14%, to close at 43,007.
The broader S&P 500 rose 1.12% and the Nasdaq Composite gained 1.46%. “We spoke with the Big Three auto dealers. We are going to give a one-month exemption on any autos coming through USMCA,” President Donald Trump said in a statement read by White House Press Secretary Karoline Leavitt.
Shares in General Motors rose 7.21%, shares in Stellantis rose 9.24%, and shares in Ford gained 5.81%. The announcement is welcome news for investors who are looking for signs that the Trump administration might further negotiate or roll back its tariff policies. The rally is a rebound after the stock market took a beating to start the week.
Auto tariff exemption boosts stocks
The Dow tumbled 1,300 points across Monday and Tuesday, largely driven by Trump’s enactment of tariffs and the subsequent retaliation from trading partners. In his address to Congress on Tuesday, Trump did not mention the stock market.
However, he said tariffs might cause a “little disturbance” in the economy. “With Canada, Mexico, and China now retaliating, trade tensions have escalated, increasing inflation risks and market volatility,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management. The rebound on Wednesday recoups some of the week’s earlier losses, but the S&P 500 is still off its previous record high, reached just two weeks ago.
Crude oil prices tumbled on Wednesday due to concerns about a brewing trade war and OPEC+ oversupplying the market. Futures on WTI crude, the US benchmark, fell 2.7% to $66.40, the lowest price since September 2024. Kevin Gordon, a senior investment strategist at Charles Schwab, said the back and forth with tariffs has created a fog of uncertainty for investors, businesses, and consumers.
“Uncertainty is the policy at this point,” Gordon said.
