In a see-saw session of midday trading on Wednesday, US equity indexes experienced notable volatility as traders speculated that President Donald Trump may be on the verge of announcing a tariff agreement with Canada and Mexico. This comes as investors also analyzed conflicting economic indicators. The Nasdaq Composite rose by 0.6%, reaching 18,392.2, while the S&P 500 increased by 0.4% to 5,799.7.
Similarly, the Dow Jones Industrial Average saw a 0.4% gain, inching up to 42,682.3. Earlier in the session, these indexes had shown mixed-to-negative performance. Energy and utilities sectors faced declines during the day, whereas materials stood out as the leading gainers. Reports indicated that Commerce Secretary Howard Lutnick remarked that President Trump is likely to unveil agreements concerning import duties with Canada and Mexico as soon as Wednesday.
Notably, despite these potential agreements, all three major equity indexes have fallen earlier this week as investors put their focus on the implications of the new import duties on the US economy. In the realm of market volatility, the CBOE's volatility index, commonly referred to as the fear gauge, declined 2.6% to 22.91, having previously traded nearly 3% higher before the market opened. On the employment front, the ADP's latest monthly assessment of private payrolls indicated an addition of 77,000 jobs in February.
This figure fell short of the anticipated 140,000 jobs projected in a Bloomberg-conducted survey. In contrast, the employment numbers for January were revised upward to show an increase of 186,000 jobs. Furthermore, the Institute for Supply Management’s US services index climbed to 53.5 in February, up from 52.8 in January.
This rise was above the 52.5 consensus expectations in a Bloomberg poll. Additionally, the S&P Global US services index was adjusted upward to 51 from an initial reading of 49.7 for February, contrasting with predictions in another survey where no revisions were anticipated. In terms of manufacturing, new orders for US factory goods rose 1.7% in January, aligning with expectations in a Bloomberg survey, reversing a 0.6% decline in December.
Excluding a notable 9.9% surge in transportation orders, new orders would have recorded a modest increase of 0.2% compared to a 0.3% gain in the prior month. In fixed income markets, most US Treasury yields increased throughout the day, with the 10-year yield rising by 6.1 basis points to 4.27%, and the 2-year yield up 1.7 basis points to 3.97%. On the corporate front, CrowdStrike ($CRWD) provided an earnings forecast for fiscal Q1 and the full year that fell below market estimates, leading to a sharp decline of 7.4% in its shares, making it the worst performer on both the S&P 500 and the Nasdaq. Celanese (CE) disclosed that its US division has initiated cash offers to repurchase up to 500 million euros ($535.2 million) of its 4.777% senior notes set to mature in 2026, along with $250 million of its 6.415% senior notes due in 2027.
Following this announcement, shares surged by 8.9%, positioning them among the top gainers within the S&P 500. Meanwhile, the US Treasury Department has directed Chevron (CVX) to initiate the shutdown of its operations in Venezuela within the next month. Consequently, shares of the oil and gas exploration company dropped by 2.1%, emerging as the largest laggard on the Dow index. In commodities, West Texas Intermediate crude oil futures plunged by 3.2%, standing at $66.04 per barrel.
US commercial crude oil inventories, excluding the reserves in the Strategic Petroleum Reserve, surged by 3.6 million barrels for the week ending February 28, following a decrease of 2.3 million barrels in the previous week, despite a forecasted modest growth of 800,000 barrels as per a Bloomberg report. In precious metals, gold futures garnered a slight gain of 0.2%, settling at $2,926.33, while silver prices experienced a more noticeable jump of 2.3%, hitting $33.12..