MARKET SNAPSHOT

U.S. stocks rebounded somewhat from two days of sharp losses after President Trump announced a one-month tariff exemption for automakers. Yields on U.S. government debt finished higher after data from the manufacturing and service sectors came in better than expected. The dollar weakened significantly. Oil futures sank amid tariff worries and OPEC+ output plans. Gold prices edged higher.

MARKET WRAPS

EQUITIES

U.S. stocks rebounded after the White House announced a one-month tariff reprieve for auto imports from Mexico and Canada, suggesting that President Trump is open to additional exemptions on import taxes on America's two-largest trading partners.

Trade tensions weighed on major indexes early in the session, even as fresh economic data suggested the U.S. service sector last month grew faster than Wall Street's expectations. But stocks turned sharply higher after President Trump granted automakers the one-month exemption from 25% duties.

Still, traders are bracing for more volatility ahead. Trump and Canadian Prime Minister Justin Trudeau spoke Wednesday on tariffs with no apparent breakthrough in the trade tensions between the two countries.

At the same time, a mounting pile of data suggests consumers' inflation expectations are climbing and the U.S. economy is slowing. A monthly ADP National Employment report on Wednesday showed hiring in the U.S. private sector slowed markedly in February.

The tech-heavy Nasdaq Composite rose 1.5%, while the S&P 500 increased 1.1%. The Dow Jones Industrial Average ended 1.1% higher.

Earlier Wednesday, Chinese shares ended mostly higher amid positive sentiment. Economists reckon that China's 5% GDP growth target, unchanged from last year, shows confidence and signals stronger policy support to boost domestic demand.

The benchmark Shanghai Composite Index gained 0.5%, the Shenzhen Composite Index advanced 0.4% and the ChiNext Price Index was flat. Hong Kong's Hang Seng Index jumped 2.8%.

Japan's Nikkei Stock Average rose 0.2% as concerns about trade frictions between the U.S. and its trading partners ebbed for the time being.

Stocks in Australia slipped, as the S&P/ASX 200 dropped 0.7%, the second consecutive day of decreases.

New Zealand's NZX-50 shed 0.5%, slumping to a third consecutive loss as trade tariffs continued to roil global equities markets.

COMMODITIES

Oil declined for a fourth straight session, settling at its lowest price since September, on prospects for a global trade war that could dent demand and plans by major oil producers to begin unwinding output cuts next month.

Official U.S. data showing a bigger-than-expected weekly rise in domestic crude inventories contributed to oil's decline.

West Texas Intermediate crude for April delivery fell 2.9% to settle at $66.31 a barrel on the New York Mercantile Exchange. May Brent crude declined by nearly 2.5% to $69.30 a barrel on ICE Futures Europe.

The bigger picture for oil "tilts bearish," said Stephen Innes, managing partner at SPI Asset Management. "Supply-side pressures, ranging from rising OPEC production to an uncertain U.S. growth trajectory, could ultimately be the dominant force shaping crude's direction in the weeks ahead."

Front-month gold added 0.2% to settle at $2,915.30 a troy ounce.

"Gold has traded higher for three days in a row... dominating safe haven flows in recent days versus President Trump's 25% tariffs on Mexico and Canada," said Robert Yawger of Mizuho Securities USA.

TODAY'S TOP HEADLINES

White House Grants One-Month Tariff Exemption for Automakers

WASHINGTON-Automakers will get a one-month reprieve from tariffs on Mexico and Canada for cars that comply with a free-trade agreement between those two nations and the U.S., the White House said Wednesday.

The move follows a request from the heads of Ford Motor, General Motors and Stellantis, White House press secretary Karoline Leavitt said, and would apply to autos imported through the U.S.-Mexico-Canada Agreement, or USMCA, the successor trade deal to 1994's North American Free Trade Agreement.

A group that represents the three automakers, the American Automotive Policy Council, in a statement thanked President Trump and said the companies will work with the administration "on our shared goals of increasing US automotive production and expanding exports."

U.S. economy is still growing, ISM says, even as Trump tariffs generate 'great uncertainty' and fuel further inflation

The numbers: The large service side of the U.S. economy that employs most Americans grew at a brisk pace in February, but businesses said they were nervous about President Donald Trump's tariffs and were already facing higher costs.

The service index compiled by the Institute for Supply Management rose to a reading of 53.5% in February from 52.8%. Any reading above 50% signals expansion.

More than eight in 10 Americans are employed by service-oriented businesses in areas such as retail, healthcare and travel.

ADP says only 77,000 private jobs created in February due to 'hiring hesitancy' amid Trump tumult

U.S. businesses created just 77,000 new jobs in February, payroll company ADP said, in a sign the economy could be slowing as businesses weighed how to respond to President Donald Trump's tariffs.

The increase was the smallest since last summer. Economists polled by the Wall Street Journal had forecast a gain of 148,000 new jobs in the ADP survey.

"Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month," said Nela Richardson, chief economist at ADP. "Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead."

Tesla has another bad month in Germany as sales tumble 76%

Tesla had its second straight difficult month in Germany, as data released Wednesday showed that vehicle registrations fell 76% in February in Europe's largest economy.

Germany's federal motor-transport authority, known by its German acronym KBA, reported the sales-registration data, which was set against a 6.4% decline for the broader market. But electric-vehicle sales overall improved by 31% year-over-year.

Tesla sales have been plunging in Europe, with some of the blame attributed to the support Chief Executive Elon Musk has given to President Donald Trump and the far-right Alternative for Deutschland, which finished second but below expectations in last month's federal elections.

Microsoft-OpenAI Partnership Gets U.K. Antitrust Clearance

U.K. antitrust officials said they wouldn't launch a formal investigation into Microsoft's ties with ChatGPT maker OpenAI, a victory for the tech giant in its bid to justify the partnership to regulators on both sides of the Atlantic.

The Competition and Markets Authority launched a review in December 2023 to determine whether Microsoft's investment in OpenAI and its partnership with the artificial-intelligence startup should be considered a de facto merger that might stifle competition in the country. Officials have now concluded this isn't the case and opted not to open a formal probe.

Joel Bamford, executive director of mergers at the CMA, said in a LinkedIn post that while Microsoft did acquire material influence over OpenAI in 2019, Microsoft never gained de facto control of the company. "Because this change of control has not happened, the partnership in its current form does not qualify for review under the U.K.'s merger control regime," Bamford said.

Expected Major Events for Thursday

00:30/AUS: Jan Building Approvals

00:30/AUS: Jan International Trade in Goods & Services

01:00/PHI: Jan Labour Force Survey

02:00/JPN: Feb Imported Vehicle Sales

07:00/MAL: Malaysia Monetary Policy Statement

09:59/PHI: Jan Money Supply (M3)

23:00/SKA: Jan Balance of payments

23:50/JPN: Feb International Reserves / Foreign Currency

23:50/JPN: Feb Provisional Trade Statistics for 1st 20 days of Month

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(END) Dow Jones Newswires

March 05, 2025 17:01 ET (22:01 GMT)

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