NEW YORK, New York - U.S. stocks were highly volatile on Wednesday with the major indices jumping back and forth into negative territory. By the end of the day, buyers held sway with the key indexes finishing well in the black. Again trade tariffs took center-stage, with President Donald Trump, seemingly bowing to financial markets pressure, easing some constraints, and implementing pauses with others. Automakers in Canada and Mexico were given a 30-day reprieve for example, provided their cars comply with the United States-Mexico-Canada Agreement which was signed into existence during Trump's first term.

"Investors have wanted to view the tariff threat as just that, a threat meant as a negotiating tactic, not one that would actually be implemented," Melissa Brown, managing director of investment decision research at SimCorp told CNBC Wednesday. "As the deadline for Canadian and Mexican tariffs drew closer, markets became concerned and reacted with a sharp sell-off. But, today, as the government announced potential agreements and relief for certain sectors, the selling frenzy started to reverse," she said.

"The one thing that seems clear is that uncertainty for investors will continue," Brown added. "What we say today may be obsolete by tomorrow."

Following are Wednesday's closing quotes for the major U.S. indices:

• S&P 500: The benchmark index rose by 1.11 percent, gaining 64.39 points to close at 5,842.54.

• Dow Jones Industrial Average: The Dow advanced 1.14 percent, adding 485.60 points to end at 43,006.59.

• NASDAQ Composite: The tech-heavy index increased by 1.46 percent, climbing 267.57 points to settle at 18,552.73.

Market Drivers

The postponement of auto tariffs was a significant catalyst for market optimism. Investors interpreted the delay as a potential easing of trade tensions, which had previously raised concerns about global economic growth.

Sector Performance

The announcement particularly benefited the automotive sector:

• General Motors (GM): Shares surged 5.8 percent.

• Ford Motor: The stock rose 4.7 percent.

• Stellantis: Shares increased by 8.4 percent.

Economic Indicators

The Federal Reserve's Beige Book reported flat to slightly negative growth across all 12 districts in February, reflecting a mixed economic landscape.

Outlook

While the delay in tariffs has provided short-term relief to the markets, investors remain cautious. The ongoing trade negotiations and their outcomes will likely continue to influence market volatility in the coming weeks.

Global Forex Markets React to U.S. Tariffs and Economic Policies

Global foreign exchange markets experienced significant movements on Wednesday, influenced by recent U.S. tariff implementations and evolving economic policies. The U.S. Dollar Index declined by 1.29 points, or 1.22 percent, to 104.45, approaching a three-month low amid new U.S. tariffs and retaliatory actions from Canada and China, raising fears of an intensifying trade war.

Euro (EUR) / U.S. Dollar (USD)

The euro strengthened against the U.S. dollar, with the EUR/USD pair rising by 1.59 percent to 1.07935. This appreciation is attributed to the euro's negative correlation with the U.S. dollar, which weakened due to escalating trade tensions following new U.S. tariffs on imports from Canada, Mexico, and China.

U.S. Dollar (USD) / Japanese Yen (JPY)

The U.S. dollar depreciated against the Japanese yen, with the USD/JPY pair declining by 0.64 percent to 148.83. Investors sought the safe-haven yen amid concerns over U.S. economic growth and the potential impacts of ongoing trade disputes.

U.S. Dollar (USD) / Canadian Dollar (CAD)

The USD/CAD pair decreased by 0.34 percent to 1.4338, reflecting a strengthening Canadian dollar. Despite new U.S. tariffs targeting Canadian imports, the loonie found support from stable oil prices and expectations of resilient economic performance.

British Pound (GBP) / U.S. Dollar (USD)

The British pound advanced against the U.S. dollar, with the GBP/USD pair increasing by 0.81 percent to 1.2897. Sterling's strength is partly due to the dollar's broad-based weakness amid trade policy uncertainties.

U.S. Dollar (USD) / Swiss Franc (CHF)

The USD/CHF pair edged up by 0.15 percent to 0.8906, indicating a slight appreciation of the U.S. dollar against the Swiss franc. This movement suggests a nuanced market response to geopolitical developments and economic indicators.

Australian Dollar (AUD) / U.S. Dollar (USD)

The Australian dollar strengthened against the U.S. dollar, with the AUD/USD pair rising by 1.04 percent to 0.6336. The Aussie benefited from improved risk sentiment and positive economic data from China, Australia's largest trading partner.

New Zealand Dollar (NZD) / U.S. Dollar (USD)

The New Zealand dollar also gained against the U.S. dollar, with the NZD/USD pair increasing by 1.09 percent to 0.5726. The kiwi's appreciation reflects broader U.S. dollar weakness and stable commodity prices supporting New Zealand's export-driven economy.

Market Overview

The U.S. dollar index experienced its worst three-day decline since November 2022, falling by 2.5 percent to 104.95 before partially recovering. This decline is attributed to the new tariffs imposed by President Trump on imports from Canada, Mexico, and China, raising concerns about U.S. economic growth and the potential for a global recession.

As global trade tensions escalate, currency markets are expected to remain volatile, with investors closely monitoring developments in U.S. trade policies and their implications for global economic stability.

Global Stock Markets React to Trade Tensions and Economic Policies

Global stock markets exhibited mixed performances on Wednesday, influenced by escalating trade tensions, potential tariff relief, and various economic policy announcements.

Canadian Market

• S&P/TSX Composite Index: Canada's main stock index gained 1.22 percent, up 298.82 points to close at 24,870.82.

UK and European Markets

In the United Kingdom, the FTSE 100 Index experienced a slight decline, shedding 3.16 points, or 0.04 percent, to close at 8,755.84. Despite the overall market softness, Barclays PLC shares rose by 3.78 percent to £3.03, outperforming the broader market.

The German DAX Performance Index surged by 754.22 points, or 3.38 percent, closing at 23,081.03. This uptick followed Germany's announcement of a substantial infrastructure investment program aimed at stimulating economic growth.

France's CAC 40 rose by 125.83 points, or 1.56 percent, ending at 8,173.75. The EURO STOXX 50 Index increased by 101.81 points, or 1.89 percent, to 5,489.12, while the Euronext 100 Index added 21.05 points, or 1.34 percent, closing at 1,589.63. Belgium's BEL 20 advanced by 36.43 points, or 0.82 percent, to 4,460.44.

Asian Markets

In Hong Kong the Hang Seng Index climbed by 652.44 points, or 2.84 percent, reaching 23,594.21.

China's SSE Composite Index edged up by 17.75 points, or 0.53 percent, closing at 3,341.96, as the National People's Congress commenced in Beijing, maintaining a 5 percent economic growth target for 2025.

In Tokyo, Japan, the Nikkei 225 advanced by 87.06 points, or 0.23 percent, to 3close at 7,418.24.

Singapore's STI Index edged up by 7.64 points, or 0.20 percent, to 3,898.40. 

In India' the S&P BSE SENSEX rose by 740.30 points, or 1.01 percent, ending at 73,730.23. Malaysia's FTSE Bursa Malaysia KLCI gained 8.76 points, or 0.56 percent, to 1,564.42. 

South Korea's KOSPI Composite Index increased by 29.21 points, or 1.16 percent, to 2,558.13.

In Taiwan the TAIEX added 275.02 points, or 1.22 percent, ending at 22,871.90. 

Oceania

Australia's S&P/ASX 200 fell by 57.00 points, or 0.70 percent, closing at 8,141.10, and the Australian All Ordinaries decreased by 57.80 points, or 0.69 percent, to 8,363.10. These declines were primarily due to concerns over escalating trade wars, with significant losses in consumer staples and financial stocks.

New Zealand's S&P/NZX 50 Index Gross declined by 57.64 points, or 0.46 percent, closing at 12,412.07.

Middle East Markets

In Egypt the EGX 30 Price Return Index rose by 113.60 points, or 0.37 percent, to 30,876.40.

Israel's TA-125 advanced by 24.41 points, or 0.97 percent, to 2,535.55.

Africa

In South Africa the Top 40 USD Net TRI Index increased by 104.44 points, or 2.27 percent, closing at 4,700.26.

Global Overview

Global markets reacted to a complex mix of geopolitical developments. U.S. President Trump's recent tariffs on imports from Canada and Mexico have heightened fears of a trade war, contributing to market volatility. However, comments from U.S. Commerce Secretary Howard Lutnick suggesting potential compromises provided some optimism.

Additionally, Germany's significant infrastructure investment plans and China's commitment to a 5 percent GDP growth target for 2025 have influenced investor sentiment across various markets.

As global economic policies continue to evolve, markets are expected to remain sensitive to developments in trade relations and fiscal strategies.

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