The S&P 500 swung between gains and losses on Wednesday as investors grappled with ongoing uncertainties surrounding President Donald Trump’s tariffs and their impact on the economy.
Major Indexes Struggle for Direction
The S&P 500 and Nasdaq Composite dipped 0.1% and 0.2%, respectively, while the Dow Jones Industrial Average rebounded by 111 points, or 0.3%, following a sharp two-day decline of more than 1,300 points.
All three indexes oscillated between positive and negative territory throughout the session. If losses hold, it would mark the third consecutive negative day for each.
Commerce Secretary’s Comments Offer Temporary Relief
Commerce Secretary Howard Lutnick said late Tuesday that an agreement on tariffs with Canada and Mexico could be forthcoming. On Wednesday, he added that Trump was considering targeted relief for certain sectors impacted by the tariffs.
These remarks briefly lifted stocks of automakers, which had been hit hard over fears of rising material costs. General Motors and Ford advanced more than 3% and 2%, respectively.
Markets Slip as Uncertainty Lingers
Despite temporary gains, the broader market fell into negative territory in late morning trading as investors awaited concrete developments on trade policy. While markets hoped for resolutions, Trump remained firm, saying a “little disturbance” from tariffs was acceptable during his Tuesday night address to Congress.
The trade war has rattled financial markets, with all three major indexes down more than 2% this week. The S&P 500 has now erased its post-Election Day gains, while the Nasdaq Composite is nearing correction territory.
Mixed Economic Data Adds to Volatility
Investors also digested mixed economic reports on Wednesday. A stronger-than-expected reading on the services sector provided a brief boost to stocks, but the ADP private payroll report showed weaker-than-anticipated job growth, reinforcing concerns of a cooling economy.
“The tariffs alone aren’t enough to hurt the economy in a noticeable way,” said Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management. “But when you take tariffs, plus broader worries about the economy, and a Fed that still might take its time on lowering rates, that’s when you start to wonder if the record highs in stocks from earlier this year were justified.”
Markets Await Clarity
With tariff uncertainty persisting and economic data sending mixed signals, investors remain cautious. Until clear resolutions emerge on trade policy and Federal Reserve decisions, market volatility is likely to continue.
