Stocks rebounded on Wednesday, avoiding a third consecutive day of losses, after President Donald Trump signaled potential exemptions to his tariff policies, boosting investor confidence. The White House announced a one-month delay on tariffs for automakers, a decision following President Trump's discussions with the heads of General Motors, Ford Motor, and Stellantis. This delay is part of a temporary exemption that applies to "any autos coming through" the trilateral trade agreement between the U.S., Mexico, and Canada, known as the USMCA.
The market's recovery saw the Dow Jones Industrial Average close up 485.60 points, or 1.14%, after experiencing a significant decline over the previous two sessions. Similarly, the S&P 500 surged 1.12%, and the Nasdaq Composite rose by 1.46%, marking a substantial rebound across major averages. Despite this positive turn, Dow futures dropped nearly 400 points following the rebound, reflecting ongoing investor anxiety.
In corporate news, Macy's reported mixed results for the fourth quarter on Thursday. While the retailer surpassed earnings expectations, it fell short on revenue as its turnaround plan began to take shape. However, Macy's "First 50" locations—stores receiving additional resources under the company's strategy—outperformed the overall business.
Amid these developments, Amazon announced plans to establish a unit dedicated to building software for AI agents. Meta's Chief Product Officer, Chris Cox, revealed that the company's forthcoming Llama 4 AI software would power these agents, indicating a growing focus on artificial intelligence within major tech companies.
In employment news, payrolls processing firm ADP reported that private companies added only 77,000 new workers in February, significantly below the Dow Jones consensus estimate of 148,000. The report highlighted losses in sectors such as trade, transportation, and utilities, which shed 33,000 positions. This data precedes Friday's highly anticipated nonfarm payrolls report, which investors will scrutinize for further economic insights.
The White House's tariff announcement and President Trump's discussions with automaker leaders have temporarily alleviated fears of rising prices and slowed growth that could lead to stagflation. Investors remain watchful of ongoing policy developments and their potential impact on market stability and economic growth.