Back to buisness? Dow surges nearly 500 points after Trump delays car tariffs

Wall Street experienced a sharp rally on Wednesday, with the Dow Jones Industrial Average surging nearly 500 points, after President Donald Trump announced a one-month delay of tariffs on automobiles from Canada and Mexico. The delay, which investors interpreted as easing trade tensions, spurred market optimism and pushed major indexes higher in choppy trading.

The Dow rose by 485.60 points, or 1.1%, closing at 43,006.59. Both the S&P 500 and the Nasdaq also saw gains, climbing 1.1% and 1.5%, respectively. The surge followed a White House announcement that Trump had agreed to postpone the implementation of new tariffs on cars, which had previously been seen as a potential catalyst for a trade war.

“We are on the tariff roller coaster,” said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. “The economic data, the Fed, and all that stuff seems to have been pushed to the background for now. It’s just a reminder of how these policies have an impact in the long run, and the markets are reacting to it.”

Earlier in the session, Wall Street had faltered amid concerns about mixed economic data and rising fears over a potential trade war. The market was initially rattled by an ISM report revealing an unexpected rise in growth in the services sector, though rising input prices tempered the enthusiasm. Additionally, ADP data showed a slowdown in private payroll growth for February, with the slowest increase in seven months.

Despite the mixed economic signals, investor sentiment turned positive following the news of the tariff delay. “The tariffs are a key factor here. There is still uncertainty about the future impact on the economy, but for now, the market is reacting favorably to the news,” added Latif.

In particular, carmaker stocks benefitted from the delay announcement. Ford saw a 5.8% rise, General Motors climbed 7.2%, and Tesla gained 2.6%. These gains helped drive the broader market rally.

However, other sectors faced pressure. Semiconductor giant Intel dropped 2.4% after Trump suggested that lawmakers should remove a law providing subsidies to the industry. Additionally, cybersecurity firm CrowdStrike saw a 6.3% drop following a disappointing forecast for first-quarter revenues.

In a sign of support for defense and manufacturing sectors, Huntington Ingalls saw a significant 12% rise in stock value, following Trump’s announcement that his administration would establish an office of shipbuilding and offer tax incentives.

While markets ended the day on a high note, concerns about the long-term impact of Trump’s trade policies, including potential inflationary pressures and slower economic growth, continue to loom over Wall Street.