Wall Street bounced back on Wednesday after two brutal days of losses, as Trump agreed to push back tariffs on Canada and Mexico. The Dow Jones Industrial Average jumped 438 points, or 1%, clawing back some of the 1,300 points it had lost over the last two sessions. The S&P 500 surged by 0.9%, and the Nasdaq Composite rose 1.1%, according to data from Google Finance. The White House confirmed that automakers complying with the United States-Mexico-Canada Agreement (USMCA) would get a one-month delay on the tariffs. That sent auto stocks soaring—Stellantis shot up 7%, while Ford and General Motors gained 4% and 5%, respectively. White House Press Secretary Karoline Leavitt said Trump was considering additional exemptions, claiming that, “The president is happy to do it.” Auto stocks surge as Trump holds off on tariffs Car manufacturers wasted no time reacting to the news. Stellantis led the charge, jumping 8%, while General Motors and Ford gained over 5% and 4%. The delay was a temporary relief for an industry caught in the middle of Trump’s trade battles. The delay announcement came after Trump had a heated call with Canadian Prime Minister Justin Trudeau, where the two discussed fentanyl trafficking. Trump posted on Truth Social, saying, “Justin Trudeau, of Canada, called me to ask what could be done about Tariffs. I told him that many people have died from Fentanyl that came through the Borders of Canada and Mexico, and nothing has convinced me that it has stopped. He said that it’s gotten better, but I said, ‘That’s not good enough.’” President Trump also suggested that Trudeau was using the situation for political gain, adding, “Good luck Justin!” In another post, Trump said: “For anyone who is interested, I also told Governor Justin Trudeau of Canada that he largely caused the problems we have with them because of his Weak Border Policies, which allowed tremendous amounts of Fentanyl, and Illegal Aliens, to pour into the United States. These Policies are responsible for the death of many people!” Retail investors panic as market swings continue Despite the rally, investors aren’t quite convinced the worst was over. The S&P 500 had already erased all of its gains since Election Day in November, and the Nasdaq Composite came dangerously close to correction territory throughout the day. Check out the stock heat map below, you’ll see what we mean. Nasdaq 100 index performance Economic data was also giving mixed signals. A U.S. service sector report came in slightly above expectations, briefly lifting the market. But the ADP private payroll report showed weaker-than-expected job growth, which of course added to growing concerns that the economy was cooling off faster than anticipated. Retail investors were already heading for the exits. JPMorgan reported that individual traders pulled $1.2 billion from the U.S. stock market in the first hour of trading on Tuesday—the biggest single-hour retail withdrawal in literally a decade. Michael Green, chief strategist at Simplify Asset Management, warned about the instability, saying, “We now are at a point where a single tweet or a single release of information can significantly change the interpretation of what markets look like.” Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, said, “The tariffs alone aren’t enough to hurt the economy in a noticeable way. 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.” The auto industry got a temporary win, but not every sector had reason to celebrate. Trump turned his attention to semiconductors, calling the CHIPS Act a mistake. The act, passed during the Biden administration, was meant to boost domestic semiconductor production and reduce reliance on China and Taiwan. But in his joint Congressional address on Tuesday night, Trump dismissed the CHIPS Act, questioning whether it was anything more than corporate welfare. Semiconductors are very important for national security and industrial production. The pandemic exposed weaknesses in the supply chain when U.S. automakers couldn’t get the chips they needed, forcing production slowdowns. Now with Trump casting doubt on long-term funding, companies had more questions than answers. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
