By Johann M Cherian and Sukriti Gupta (Reuters) – U.S. stock index futures experienced an upward surge on Wednesday, rebounding from a previous session marked by a significant selloff. This positive movement followed remarks made by a top official indicating that President Donald Trump might be inclined to ease the tariffs he had imposed on the nation’s primary trade partners.
Late on Tuesday, Commerce Secretary Howard Lutnick revealed that President Trump, who had enforced a 25% tariff on Canada and Mexico, is contemplating providing some relief on the import of products such as cars and auto parts that adhere to the U.S.-Mexico-Canada free-trade agreement. In premarket trading, notable companies like Ford saw a 2.5% increase, General Motors witnessed a rise of 4.7%, and Tesla gained 1.8%, all recovering from sharp declines seen in the previous trading session.
Mohit Kumar, the chief Europe economist at Jefferies, remarked, “If Lutnick’s comments regarding potential tariff relief for Canada and Mexico materialize, it could alleviate some of our concerns.” In addition to this news, investors embraced Trump’s commitment to extend the tax cuts initiated in 2017, a move that has bolstered market sentiment since his election triumph in November. Trump reiterated his tax cut plans during an address to Congress on Tuesday, emphasizing that “America is back.”
As of 06:51 a.m. ET, Dow E-minis were up by 199 points, or 0.47%, S&P 500 E-minis showed a 30-point increase, equivalent to 0.52%, and Nasdaq 100 E-minis surged by 140.5 points or 0.69%. Additionally, futures tracking the domestically focused Russell 2000 index also registered a notable increase of 1.1%.
Trump escalated global trade tensions on Tuesday by imposing tariffs on key trade partners, citing deficiencies in border controls. Analysts anticipate that his policies may fuel inflation, slow down the economy, and erode corporate profits, particularly at a time when several reports have indicated a cooling economy. The benchmark S&P 500 has declined by approximately 6% from its peak, while the tech-heavy Nasdaq has approached a 10% drop from its highest point.
Looking ahead, key data releases such as ADP’s national employment report and ISM’s services sector survey will be closely monitored throughout the day. The Federal Reserve is also set to reveal its beige book at 2:00 p.m. ET, shedding light on the impact of tariff uncertainty on the largest economy globally. Traders are currently anticipating the central bank’s first interest rate cut of the year to occur in June, as per data compiled by LSEG.
Mega-cap companies like Amazon.com and Meta experienced gains of over 0.8% each. Chipmakers Nvidia and Broadcom also rose by around 1.
