U.S. stock futures rose early Wednesday as traders hoped for a possible compromise on the Trump administration’s tariffs targeting goods from key trade partners. The Dow Jones Industrial Average rose 242 points, or 0.6%, while the S&P 500 and Nasdaq Composite added 0.6% and 0.7%, respectively. Commerce Secretary Howard Lutnick said Tuesday on Fox Business that the U.S. might meet Canada and Mexico somewhere “to work something out” on tariffs.
Earlier in the day, U.S. levies on Canadian and Mexican imports took effect. Canada responded with duties of its own, while Mexico said it would unveil retaliatory measures over the weekend. Those tariffs sent stocks tumbling on Tuesday.
The blue-chip Dow fell 670.25 points, or 1.55%. The S&P 500 dropped 1.22%, and the Nasdaq Composite shed 0.35%. The tech-heavy Nasdaq had dipped more than 2% at its lowest point and came within striking distance of correction territory, a term that refers to an index falling 10% from a recent peak.
Tariff talks lift stock futures
“The thing that we have emphasized over and over again is that Trump introduces uncertainty. We now are at a point where a single tweet or a single release of information can change the interpretation of what markets look like,” said Michael Green, chief strategist at Simplify Asset Management.
Green added that a mounting trade war, exacerbated by retaliatory tariffs, could place a damper on the economy going forward, although it is still uncertain what the long-term prospects will look like. “You almost end up in a forced savings regime, which in turn affects employment, wealth, and that’s what markets are trying to price right now. We don’t actually know,” he told reporters.
President Donald Trump addressed the market’s stress over the tariffs, saying that a “pause” from the levies was OK. “Tariffs are about making America rich again and making America great again. And it’s happening, and it will happen rather quickly,” he said.
New economic releases on Wednesday morning that could shed light on the state of the U.S. economy include the ADP private payrolls report for February, as well as the purchasing managers’ index for last month. Companies due to report quarterly earnings on Wednesday include AeroVironment, CrowdStrike, and Burlington Stores.
