Nasdaq Composite jumped 1.46% to 18,552.73
Stocks bounced back on Wednesday after two straight losses, as investors hoped an automaker exemption from President Donald Trump's tariffs could signal further policy concessions.
The Dow Jones Industrial Average rebounded 485.60 points, or 1.14%, to finish at 43,006.59, recouping some losses after losing more than 1,300 points over the last two sessions. The S&P 500 added 1.12% to 5,842.63, while the Nasdaq Composite jumped 1.46% to 18,552.73.
Stocks took a leg up after the White House announced a one-month delay for tariffs on automakers whose cars meet the United States-Mexico-Canada Agreement (USMCA) standards. The news sparked a rally in auto stocks, as Stellantis surged more than 9%, while Ford and General Motors gained more than 5% and 7%, respectively.
Press Secretary Karoline Leavitt said Trump was open to providing additional tax exemptions.
Traders see that “the administration is going to respond to market pressure,” said Ross Mayfield, investment strategy analyst at Baird, adding that the White House will “scramble” to adjust policy as needed. “This is further confirmation for investors who feel that way.”
The announcement resulted in a sharp rally in the afternoon, with roughly three-quarters of S&P 500 members finished higher, while the small cap-focused Russell 2000 advanced about 1%. Microsoft, Tesla, and other tech stocks bounced back after leading the market's recent drawdown.
However, uncertainty lingered as Trump told Canadian Prime Minister Justin Trudeau that Canada's fentanyl efforts were "not good enough." The three indexes swung between positive and negative territory Wednesday before the announcement of delays for automakers, underscoring the heightened market volatility as investors tracked the status of tariff policy.
Despite the rebound, major indexes are still down more than 1% for the week as investors track developments on Trump's tariffs and potential retaliatory plans from China, Mexico, and Canada.
