Wall Street closed higher on Wednesday courtesy of positive investor response to President Donald Trump's one-month delay in auto tariffs and economic data evaluation. The Nasdaq Composite, the Dow and the S&P 500 ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 1.1% or 485.60 points to close at 43,006.59. Notably, 24 components of the 30-stock index ended in positive territory, while four finished in the negative zone.
The tech-heavy Nasdaq added 267.57 points or 1.5% to close at 18,552.73.
The S&P 500 gained 1.1% or 64.48 points to end at 5,842.63. Nine out of the 11 broad sectors of the benchmark ended in positive territory. The Materials Select Sector SPDR (XLB), the Industrials Select Sector SPDR (XLI), the Consumer Discretionary Select Sector SPDR (XLY) and the Technology Select Sector SPDR (XLK) rose 2.6%, 1.6%, 1.5% and 1.4%, respectively.
The fear-gauge CBOE Volatility Index (VIX) declined 6.7% to 21.93. A total of 15.50 billion shares were traded on Wednesday, lower than the last 20-session average of 15.97 billion. The S&P 500 posted three new 52-week highs and eight new lows, while the Nasdaq recorded 42 new 52-week highs and 163 new lows.
On Wednesday, President Donald Trump agreed to delay tariffs on some North American-built vehicles by a month after meeting with the CEOs of General Motors, Ford and Stellantis, the White House said. The exemption is for vehicles that meet USMCA rules, but reciprocal tariffs start on April 2.
Automakers had asked for relief, citing the highly integrated North American supply chain. Stellantis said it needs time to adjust without business disruptions, but Trump argued that tariffs would boost U.S. auto industry growth.
Shares of Ford Motor Company F and General Motors Company GM increased 5.8% and 7.2%, respectively, after the news.General Motors currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
Private sector job growth was sluggish in February according to ADP, as only 77,000 jobs were added, considerably lower than January’s revised 186,000 and the 148,000 consensus estimate. It was the weakest gain since July, and that has people worried about an economic slowdown.
Sectors like trade, transportation and utilities lost 33,000 jobs, and education and health services followed suit, with a loss of 28,000. But leisure and hospitality created 41,000 jobs, and manufacturing created 18,000.
Investors are waiting for nonfarm payrolls data set to be released on Friday, and it is expected to show a more robust labor market. But federal job cuts and funding freezes are likely to affect employment numbers in the coming months.
The Institute of Supply Management reported that the services PMI (purchasing managers’ index) for February came in at 53.5, beating the consensus estimate of 52.9. The metric for January was 52.8. Any reading above 50 indicates expansion in service activities.
For the week ended Feb. 28, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.6 million barrels from the previous week. The metric for the previous week (ended Feb. 21) decreased by 2.3 million barrels.
The Department of Commerce reported that factory orders (new orders for both manufacturing durable and nondurable goods) for January increased 1.7% month over month, higher than the consensus estimate of 1.6%. However, the metric for December was revised upward to a decrease of 0.6% from a decline of 0.9% reported earlier.
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