The stock market staged a recovery rally on Wednesday, with the Dow Jones Industrial Average rebounding 485.60 points, or 1.14%, to finish at 43,006.59. The S&P 500 added 1.12% to 5,842.63, while the Nasdaq climbed 1.46% to 18,552.73. Investors hoped that an exemption for automakers from President Donald Trump’s controversial tariffs would open the floodgates for more concessions.
Tesla surged more than 9%, while Ford and General Motors added more than 5% and 7%, respectively. White House Press Secretary Karoline Leavitt indicated that Trump could provide additional tariff exemptions. Ross Mayfield, investment strategy analyst at Baird, said, “This is further confirmation for investors who feel that the administration is going to respond to market pressure.”
About three out of four S&P 500 members finished higher, while the small cap-focused Russell 2000 advanced about 1%.
Tech stocks such as Apple and Microsoft also gained during the session. 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.
Dow rebounds on tariff hope
The energy and utility sectors failed to find support Wednesday even as the broader market rose. The energy sector was down 1.4% as oil prices fell on OPEC+ plans to increase production starting in April gradually. JPMorgan suggests that the recent pullback in Best Buy’s stock could provide an opportunity for investors to buy.
Shares rose more than 1% in afternoon trading after the firm reiterated its overweight rating on the stock. SimCorp’s analyst, James Brown, stated that Trump’s auto tariff extension helped reverse the recent “selling frenzy” in markets. The White House’s announcement on Wednesday appeared to have provided the much-needed relief to halt the downturn seen earlier in the week.
The positive movements in the stock market on Wednesday reflect cautious optimism among investors that the Trump administration may be responsive to market pressures and willing to negotiate on trade tariffs. However, continuing uncertainty will likely keep market volatility high in the short term.
Image Credits: Photo by Jason Briscoe on Unsplash
