US Stocks Surge After Auto Tariff Exemption Announcement

New York (CNN) — US stocks experienced a significant rebound on Wednesday following two days of sharp declines. This rally was largely prompted by the Trump administration’s announcement of a one-month exemption from auto tariffs for Canada and Mexico, which alleviated investor fears surrounding a potential global trade war.

The Dow Jones Industrial Average surged by 615 points before slightly retracting to close at a gain of 486 points, or 1.14%, settling at 43,007. Meanwhile, the broader S&P 500 climbed 1.12%, and the Nasdaq Composite increased by 1.46%.

During a press briefing on Wednesday, President Donald Trump stated, “We spoke with the Big Three auto dealers. We are going to give a one-month exemption on any autos coming through USMCA,” referring to Stellantis, Ford, and General Motors. Following the announcement, shares in General Motors rose by 7.15%, Stellantis by 9.3%, and Ford by 5.8%.

The announcement was well-received by investors looking for indications that the administration might further negotiate or roll back its tariff policies. The market’s rise comes as a welcome relief after the Dow plummeted by 1,300 points over the initial days of the week, propelled by the implementation of tariffs and the retaliatory measures from trading partners.

In his address to Congress on Tuesday, Trump did not directly address the stock market, although he acknowledged tariffs might cause a “little disturbance” in the economy. Experts have expressed growing concerns over the increasing uncertainty for investors.

“With Canada, Mexico, and China now retaliating, trade tensions have escalated, increasing inflation risks and market volatility,” noted Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a report on Wednesday.

Despite the gains made on Wednesday, the S&P 500 remains below its previous record high reached two weeks prior, reflecting ongoing market volatility.

In the commodities sector, crude oil prices fell sharply due to apprehensions about a brewing trade war and the potential oversupply by OPEC+. West Texas Intermediate (WTI), the U.S. benchmark, saw futures decrease by 2.7% to $66.40, marking the lowest price since September 2024. At one point during trading, crude prices dipped to $65.22, the lowest intraday price since March 2023.

Kevin Gordon, a senior investment strategist at Charles Schwab, commented on the current state of uncertainty: “Uncertainty is the policy at this point.”

CNN’s Elisabeth Buchwald and Matt Egan contributed reporting.