Trump's tariff change lifts markets as auto industry cheers
The Tuesday session on Wall Street ended with gains, as the S&P 500 and the Dow marked their sixth consecutive day of profits. This represents the longest streak since July for the Dow and November for the S&P 500. The increases are attributed to hopes for tariff policy easing by President Donald Trump.
The Dow Jones Industrial rose 0.75%, closing at 40,528 points, and the S&P 500 increased by 0.58%, ending the day at 5,561 points. The mid-cap index, the Russell 2000, grew by 0.49% to 1,975 points.
U.S. Commerce Secretary Howard Lutnick stated that President Donald Trump would sign an executive order easing car tariffs later that day. According to the new regulations, cars assembled in the U.S. with less than 15% foreign parts will be exempt from the tax.
American car tariffs: White House changes stance
As the Secretary told reporters, the new regulations, introduced less than a month after tariffs were imposed on imported cars, aim to encourage automakers to move production and the automotive parts supply chain to the U.S. Until now, cars produced in the U.S. were taxed based on the percentage of foreign components. Now, they will be exempt from tariffs if they consist of at least 85% American parts.
Additionally, Lutnick announced that automakers will also receive a 15% rebate on the costs of imported parts, which will increase in price due to tariffs. Manufacturers will also be exempted from paying other tariffs, including those on steel and aluminum, and 10% tariffs on most other goods.
"Until we find some resolution on the trade front, I think little else will matter," said Ross Mayfield, an investment strategist at Baird, adding that the S&P 500 index could be trading between 5,100 and 5,700 points while investors await progress in trade discussions.
The American consumer confidence index fell to 86 points in April from 93.9 points in the previous month, after revision, according to the Conference Board report. Analysts had expected the index to be 87.7 points.
The number of job openings in the U.S., according to the JOLTS survey, was 7.192 million in March compared to 7.48 million recorded the previous month after a revision from 7.568 million. It was expected that the number of available positions would be 7.49 million.
