US benchmark equity indexes experienced gains on Wednesday following the White House's decision to grant automakers a one-month exemption from tariffs. The Nasdaq Composite climbed 1.5% to close at 18,552.7, while both the Dow Jones Industrial Average and the S&P 500 saw increases of 1.1%, finishing at 43,006.6 and 5,842.6, respectively.
Excluding the energy and utilities sectors, all other sectors recorded positive growth, with materials leading the charge. In a move to alleviate concerns within the auto industry, President Donald Trump exempted automakers from tariffs imposed on Mexico and Canada for a duration of one month. This decision may have significant implications for the industry, as Trump considers further relief in response to industry concerns, as reported by official White House sources. These developments come on the heels of Trump's newly minted tariffs, which saw a steep 25% charge against both nations commencing on Tuesday.
At the same time, the US government escalated its tariffs on imports from China, leading to mixed responses from the affected nations, including announced retaliatory measures from Canada and China. The recent fluctuations in US Treasury yields mirrored the equity market's performance, with the 10-year rate experiencing an increase of seven basis points to reach 4.28%, while the two-year rate rose 5.2 basis points to 4.007%.
These shifts suggest an evolving interest rate landscape that investors are closely monitoring. Adding further complexity to the economic landscape, two surveys released earlier this week delivered contrasting messages about the health of the US services sector for February. The Institute for Supply Management's data revealed an unexpected uptick in activity, whereas S&P Global indicated a slowdown in growth, both underscoring the ongoing uncertainty surrounding Trump's trade tariff policies. According to the Federal Reserve's latest Beige Book, economic activity has seen a slight increase since mid-January, albeit with growing concerns regarding potential tariffs and their impact on various sectors. In employment news, last month's growth within the US private sector slowed, marking the weakest pace since July according to Automatic Data Processing (ADP).
Chief Economist Nela Richardson attributed this trend to policy uncertainties and a potential downturn in consumer spending, which may have led to reductions in workforce numbers. Looking ahead, the Bureau of Labor Statistics is expected to announce a net addition of 160,000 nonfarm jobs for February, a figure that suggests a slight increase from the previous month's report of a 143,000 gain based on a survey by Bloomberg. In commodity markets, West Texas Intermediate crude oil saw a decline of 2.7%, closing at $66.40 per barrel.
These movements in oil prices are likely influenced by the ongoing geopolitical and economic narratives. Corporate news also stirred activities on the equity front. Brown-Forman's fiscal third-quarter earnings surpassed market expectations; however, a year-over-year revenue decline raised eyebrows.
Despite this, the spirits maker reaffirmed its full-year outlook, and as a result, its class A and B shares surged by 10% each, ranking among the top gainers on the S&P 500. Conversely, shares of CrowdStrike experienced the largest drop on the S&P 500, plummeting by 6.3%. This decline followed the cybersecurity firm’s disappointing earnings outlook for its fiscal first quarter and the full year. Similarly, Abercrombie & Fitch saw a notable decrease in share value, plummeting 9.2% after the retailer projected a slowdown in sales growth for fiscal 2025, compounded by an underwhelming first-quarter earnings forecast, which failed to meet Wall Street expectations. In precious metals, gold gained 0.3%, reaching $2,928.30 per troy ounce, while silver rose by 2.7%, trading at $33.24 per ounce..