NEW YORK (AP) — U.S. stocks are holding a bit steadier, for now at least, following the sharp tumble that wiped out the last of the “Trump bump” they received following President Donald Trump’s election. The S&P 500 was virtually unchanged in early Wednesday trading. The Dow Jones Industrial Average was also flat, and the Nasdaq composite rose 0.2%. Sharper moves may still be ahead in the day, though, with a couple potential flashpoints already on the calendar. A report will show how retailers, restaurants and other businesses in the U.S. services industries are faring. Perhaps more consequentially, Trump may announce whether he’ll modify the tariffs he placed on Mexico, Canada and China early Tuesday.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
(AP) — Wall Street stabilized in premarket trading Wednesday in a rocky week dominated by steep U.S. tariffs, and retaliatory tariffs from Mexico, Canada and China, that have roiled global markets.
Futures for the S&P 500 and Dow Jones Industrial Average each ticked up 0.2%. Nasdaq futures rose 0.4%.
Yet the gains are far from recouping losses this week as the trade war between the U.S. and key trading partners grows hotter.
The Trump administration imposed 25% tariffs on imports from Canada and Mexico starting Tuesday as well as doubling tariffs for Chinese exports. All three countries have announced retaliatory actions, sparking worries about a slowdown in the global economy.
“The global trade outlook for 2025 is marked by solid growth amid significant challenges, many of which can be traced back to the policies proposed by U.S. President Trump,” economists at ING said in a report.
But global trade is diverse, with the United States accounting for just 13.6% of total global exports and a similar share of global imports. China's exports to the rest of Asia have been surging and that can help offset reduced trade with the United States, they noted.
On Tuesday, the S&P 500 fell 1.2%, with more than 80% of the stocks in the benchmark index closing lower. The Dow slid 1.6% and the Nasdaq composite slipped 0.4%. The major U.S. markets are down 3% this week.
Three major U.S. banks, among Tuesday's biggest losers, are up early after the government dropped its lawsuit against them over their Zelle payment systems. Wells Fargo, JPMorgan and Bank of America all ticked up around 1% after the Consumer Financial Protection Bureau pulled its lawsuit that charged the banks with failing to protect consumers from fraud via Zelle.
While markets have been consumed with tariffs in recent days, there will be an opportunity to shift focus on Friday when the government reports its latest jobs data. Largely stable in recent years, anxiety is growing about how Trump's massive government downsizing plans will affect the labor market.
Financial markets could soon face more twists in the tariff drama. After Tuesday's closing bell, Commerce Secretary Howard Lutnick told Fox Business News that the U.S. would likely meet Canada and Mexico “in the middle" on tariffs, with an announcement coming as soon as Wednesday.
The market rally after Trump’s election in November had been built largely on hopes for policies that would strengthen the U.S. economy and businesses. Worries about tariffs raising consumer prices and reigniting inflation have been weighing on both the economy and Wall Street.
They're also prompting warnings from retailers, given signs that U.S. households are becoming more pessimistic about inflation and pulling back on spending. Consumer spending has essentially driven U.S. economic growth in the face of high interest rates.
Retaliations against the higher tariffs were swift.
China responded to new U.S. tariffs by announcing it will impose additional tariffs of up to 15% on imports of key U.S. farm products, including chicken, pork, soy and beef, and expanded controls on doing business with key U.S. companies. Canada plans on slapping tariffs on more than $100 billion of American goods over the course of 21 days. Mexico also plans tariffs on goods imported from the U.S.
China also announced it intends to keep its economy growing at around a 5% annual pace in 2025, in line with last year’s target, as it opened the annual session of its largely ceremonial legislature. Premier Li Qiang also promised more government spending and other measures to support growth.
Hong Kong’s Hang Seng index jumped 2.8% to 23,594.21, while the Shanghai Composite index climbed 0.6% to 3,341.96.
Some Chinese commentators noted that Beijing had been bracing for tariffs of up to 60%. As of Tuesday, Trump has pushed import duties on Chinese products to 20%.
Tokyo’s Nikkei 225 index edged 0.2% higher to 37,418.24. In South Korea, the Kospi gained 1.2% to 2,558.13, while Australia’s S&P/ASX 200 shed 1.2% to 8,141.10.
In Europe, Germany’s DAX surged 3.2% by midday as the prospective partners in the country’s next government said they want to loosen rules on limiting debt to allow for higher defense spending, an issue that has gained urgency given the wavering U.S. commitment to European allies.
The CAC 40 in Paris jumped 2%, while Britain’s FTSE 100 advanced 0.4%.
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Elaine Kurtenbach And Matt Ott, The Associated Press
