Late yesterday, commerce secretary Howard Lutnick said Trump, who has slapped 25% tariffs on Canada and Mexico, is considering granting some relief on imports of items such as cars and autoparts, that comply with the US-Mexico-Canada free-trade agreement.
In premarket trading, Ford rose 2.5%, General Motors added 4.7% and Tesla gained 1.8%, after logging sharp declines in the previous session.
“If Lutnick’s comments about giving relief on tariffs for Canada/Mexico holds, it would ease some of our concerns,” said Mohit Kumar, chief Europe economist at Jefferies.
Investors also welcomed Trump’s commitment to extend his 2017 tax cuts, which has buoyed market sentiment since his election victory in November.
“He reiterated his tax cut plans in an address to Congress yesterday, where he said, “America is back”.
At 6.51am, Dow E-minis were up 199 points, or 0.47%, S&P 500 E-minis were up 30 points, or 0.52%, and Nasdaq 100 E-minis were up 140.5 points, or 0.69%.
Futures tracking the domestically focused Russell 2000 index rose 1.1%.
Trump escalated a global trade war yesterday as he imposed tariffs on top trade partners, citing ineffective border controls.
Analysts expect his policies to fan inflation pressures, slow the economy and eat into corporate profits, at a time when multiple reports have suggested a cooling economy.
The benchmark S&P 500 has fallen about 6% from its record high, while the tech-heavy Nasdaq has come close to confirming a 10% drop from its peak.
On the data front, ADP’s national employment report and ISM’s services sector survey will be in focus later in the day.
The Federal Reserve is also slated to unveil its beige book at 2pm, that will throw light on the impact tariff uncertainty has had on the world’s largest economy.
Traders now see the central bank lowering borrowing costs for the first time this year in June, according to data compiled by LSEG.
Megacaps such as Amazon.com and Meta advanced over 0.8% each.
Chipmakers Nvidia and Broadcom rose about 1.8% each, while Intel added 0.9%.
Investors assessed Trump’s remarks as he said lawmakers should get rid of a landmark 2022 bipartisan law on subsidies to the semiconductor industry.
CrowdStrike fell 7.5% after the cybersecurity firm forecast first-quarter revenue slightly below estimates, due to weak spending on its cybersecurity products.
Big banks such as Citigroup and JPMorgan Chase rose 1.4% and 0.9%, respectively, after the S&P 500 banks index logged its steepest daily loss in nearly two years in the previous session.
T-Mobile fell 1.6% after brokerage HSBC downgraded the wireless carrier to “hold” from “buy”.
Across the Atlantic, the Dax jumped 3.5% after Germany’s new government agreed to overhaul borrowing rules to revamp military spending and revive growth in Europe’s largest economy.