U.S. Futures Surge as Trump Considers Tariff Relief

(Reuters) – U.S. stock index futures experienced a notable rise on Wednesday, rebounding from a selloff in the previous session. This positive shift comes after a senior official indicated that President Donald Trump might ease tariffs imposed on the nation’s primary trade partners. Late on Tuesday, Commerce Secretary Howard Lutnick suggested that Trump, who has enforced a 25% tariff on imports from Canada and Mexico, is contemplating granting some relief on certain imports, including cars and autoparts that align with the U.S.-Mexico-Canada free-trade agreement.

Market Reactions to Tariff Relief Hints

“If Lutnick’s comments about providing relief on tariffs for Canada and Mexico hold true, it would alleviate some of our concerns,” stated Mohit Kumar, chief Europe economist at Jefferies. Investors are also responding positively to Trump’s commitment to extend his 2017 tax cuts, which have significantly buoyed market sentiment since his election victory in November. In an address to Congress on Tuesday, Trump reiterated his tax cut plans, declaring, “America is back.”

Futures Performance

As of 05:28 a.m. ET, Dow E-minis were up 242 points, or 0.57%, S&P 500 E-minis rose by 36.5 points, or 0.63%, and Nasdaq 100 E-minis increased by 151.5 points, or 0.74%. Trump’s recent actions have escalated a global trade war, as he imposed tariffs on key trade partners, citing ineffective border controls. Analysts are concerned that his policies may exacerbate inflation pressures, slow economic growth, and impact corporate profits, especially as multiple reports indicate a cooling economy.

Focus on Economic Data

On the economic front, the ADP’s national employment report and ISM’s services sector survey are set to be released later in the day. Additionally, the Federal Reserve is scheduled to unveil its beige book at 2:00 p.m. ET, which will provide insights into how tariff uncertainty has affected the world’s largest economy.

Sector Performance

In the tech sector, chipmakers Nvidia saw a rise of 1.4%, while Broadcom jumped 2%, and Intel climbed 1.1%. Investors are closely analyzing Trump’s remarks regarding the potential repeal of a landmark 2022 bipartisan law that provides subsidies to the semiconductor industry. However, Crowdstrike faced a setback, falling 8.2% after the cybersecurity firm projected first-quarter revenue slightly below estimates, attributed to reduced spending on its cybersecurity products.

Banking Sector Gains

Major banks such as Citigroup and JPMorgan Chase experienced gains of over 1.3% each, following the S&P 500 banks index recording its steepest daily loss in nearly two years during the previous session. This rebound reflects a renewed confidence in the banking sector amidst ongoing economic uncertainties.

European Market Response

Across the Atlantic, Germany’s Dax index surged by 3.5% after the new government agreed to overhaul borrowing rules aimed at revamping military spending and stimulating growth in Europe’s largest economy. This development is expected to have a positive ripple effect on the European markets, further enhancing investor sentiment.

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