US stock futures climb on hopes of tariff compromise
U.S. stock futures climbed early Wednesday as traders anticipated a potential compromise on the Trump administration’s tariffs targeting key trade partners.
Futures tied to the Dow Jones Industrial Average rose 242 points, or 0.6%. S&P 500 futures and Nasdaq 100 futures added 0.6% and 0.7%, respectively, News.Az reports, citing CNBC.
Commerce Secretary Howard Lutnick said Tuesday on Fox Business that the U.S. might meet Canada and Mexico somewhere “in the middle” to “work something out” on tariffs. Earlier in the day, U.S. levies on Canadian and Mexican imports took effect. Canada responded with duties of its own, while Mexico said it would unveil retaliatory measures over the weekend.
Those tariffs sent stocks tumbling on Tuesday. The blue-chip Dow tumbled 670.25 points, or 1.55%. The S&P 500 dropped 1.22%, and the Nasdaq Composite shed 0.35%. The tech-heavy Nasdaq had dipped more than 2% at its lowest point and came within striking distance of correction territory, a term that refers to an index falling 10% from a recent peak.
“The thing that we have emphasized over and over again is that Trump introduces uncertainty. We now are at a point where a single tweet or a single release of information can significantly change the interpretation of what markets look like,” said Michael Green, chief strategist at Simplify Asset Management.
Green added that a mounting trade war, exacerbated by retaliatory tariffs, could place a damper on the economy going forward, although it is still uncertain what the long-term prospects will look like.
“You almost end up in a forced savings regime, which in turn negatively affects employment, negatively affects wealth, and that’s what markets are trying to price right now. We genuinely don’t actually know,” he told CNBC.
President Donald Trump addressed the market’s stress over the tariffs, saying that a “little disturbance” from the levies was OK. “Tariffs are about making America rich again and making America great again. And it’s happening, and it will happen rather quickly,” he said.
New economic releases on Wednesday morning that could shed light on the state of the U.S. economy include the ADP private payrolls report for February, as well as the purchasing managers’ index for last month.
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