Lingering Tariff Concerns May Spark Initial Pullback On Wall Street

The major U.S. index futures are currently pointing to a notably lower open on Thursday, with stocks likely to move back to the downside after recovering from early weakness to end the previous session sharply higher.

Ongoing concerns about the economic impact of President Donald Trump’s new tariffs on Canada, Mexico and China may lead traders to cash in on yesterday’s gains.

While Trump’s decision to grant a one-month tariff exemption for automakers contributed to the turnaround on Wednesday, uncertainty about further exemptions may weigh on Wall Street.

A report from Bloomberg said Trump is considering exempting certain agricultural products from the tariffs imposed on Canada and Mexico.

Traders may also look to move money out of the markets amid worries about the economy ahead of Friday’s closely watched monthly jobs report.

Economists currently expect employment to climb by 160,000 jobs in February after rising by 143,000 jobs in January. The unemployment rate is expected to remain unchanged in February after edging down to 4.0 percent in January.

With the more closely watched monthly jobs report looming, the Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended March 1st.

Stocks showed a significant turnaround over the course of the trading session on Wednesday, recovering from early weakness to end the day sharply higher. With the rebound, the major averages regained some ground after moving substantially lower over the past several sessions.

The major averages pulled back off their best levels going into the close but still posted strong gains. The Nasdaq surged 267.57 points or 1.5 percent to 18,552.73, the S&P 500 shot up 64.48 points or 1.1 percent to 5,842.63 and the Dow jumped 485.60 points or 1.1 percent to 43,006.59.

The early weakness on Wall Street reflected lingering concerns about the economic impact of President Donald Trump’s new tariffs on Canada, Mexico and China.

However, stocks rebounded after a report from Bloomberg said the Trump administration is considering a one-month delay for automakers from newly imposed tariffs on Mexico and Canada.

The White House later confirmed the exemption for automakers, noting the move came after Trump spoke with heads of General Motors (GM), Ford Motor (F) and Stellantis (STLA).

White House Press Secretary Karoline Leavitt also said Trump was open to providing additional tariff exemptions.

Earlier in the day, some negative sentiment was generated in reaction to a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of February.

ADP said private sector employment rose by 77,000 jobs in February after climbing by an upwardly revised 186,000 jobs in January.

Economists had expected private sector employment to grow by 140,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

Private sector job growth slowed to the lowest level since last July, with trade and transportation, health care and education, and information showing job losses, ADP said.

“Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month,” said ADP chief economist Nela Richardson.

She added, “Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”

Meanwhile, the Institute for Supply Management released a separate report showing an unexpected uptick by its reading on U.S. service sector activity in the month of February.

The ISM said its services PMI inched up to 53.5 in February from 52.8 in January, with a reading above 50 indicating growth. Economists had expected the index to edge down to 52.6.

Airline stocks showed a substantial move back to the upside following recent weakness, with the NYSE Arca Airline Index soaring by 4.3 percent after ending the previous session at its lowest closing level in well over four months.

Significant strength was also visible among gold stocks, as reflected by the 4.0 percent surge by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid an increase by the price of the precious metal.

Steel stocks also saw considerable strength on the day, resulting in a 3.5 percent jump by the NYSE Arca Steel Index.

Telecom, software and networking stocks have also moved notably higher, while oil producer stocks moved sharply lower amid a steep drop by the price of crude oil.

Commodity, Currency Markets

Crude oil futures are rising $0.20 to $66.51 a barrel after plunging $1.95 to $66.31 a barrel on Wednesday. Meanwhile, after inching up $5.40 to $2,926 an ounce in the previous session, gold futures are falling $15.80 to $2,910.20 an ounce.

On the currency front, the U.S. dollar is trading at 147.56 yen versus the 148.88 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0824 compared to yesterday’s $1.0789.

Asia

Asian stocks advanced on Thursday after U.S. President Donald Trump exempted automakers from newly imposed tariffs on Mexico and Canada for one month, raising hopes for negotiations.

The U.S. dollar declined ahead of key U.S. jobs data due on Friday and gold was slightly lower, while oil prices rebounded after four straight sessions of losses on demand and oversupply concerns.

China’s Shanghai Composite Index jumped 1.2 percent to 3,381.10 after Beijing pledged policy support for tech and consumption.

Hong Kong’s Hang Seng Index surged 3.3 percent to 24,369.71 ahead of the release of Chinese trade data on Friday.

Alibaba Group Holding shares soared 8.4 percent after the company announced a model that it claims provides DeepSeek-level performance with far less data. The company also said the model is more energy and cost efficient.

Japanese markets advanced as U.S. tariff worries receded. The Nikkei 225 Index advanced 0.8 percent to 37,704.93, while the broader Topix Index settled 1.2 percent higher at 2,751.41.

Among the prominent gainers, Mitsubishi Heavy Industries soared 10.8 percent and IHI Corp. gained 2.6 percent. Sony surged 4 percent, Nissan Motor rose 1.1 percent and Honda Motor jumped 2 percent, driven by yen weakness.

Seoul stocks rose notably as government data showed South Korea’s consumer inflation softened in February for the first time in four months. The Kospi climbed 0.7 percent to 2,576.16.

Defense-related stocks surged, with Hyundai Rotem rising 1.6 percent and LIG Nex1 rallying 5.8 percent after European governments such as Denmark and the U.K. announced boosts to defense spending.

Australian markets ended lower, dragged down by energy, technology and consumer stocks. The benchmark S&P/ASX 200 Index dropped 0.6 percent to 8,094.70 as trade balance figures for January lagged forecasts. The broader All Ordinaries Index closed down 0.4 percent at 8,326.40.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index edged up by 0.1 percent to 12,428.84.

Europe

European shares are turning in a mixed performance during trading on Thursday after the European Central Bank announced its widely expected decision to cut interest rates by another 25 basis points.

While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 1.1 percent.

Automakers Volkswagen, Stellantis and BMW rose after U.S. President Donald exempted automakers from newly imposed tariffs on Mexico and Canada for one month.

Deutsche Post AG shares have soared nearly 12 percent after the German postal company announced a reduction in its workforce.

Airline Air France-KLM has also moved sharply higher after its fourth quarter and annual results topped expectations.

Lufthansa Group has also surged after saying it expects 2025 earnings to be significantly higher than last year.

Motor and home insurer Admiral Group has also moved sharply higher after reporting a 90 percent jump in annual pre-tax profit.

Meanwhile, Consumer goods maker Reckitt Benckiser has moved to the downside after missing fourth-quarter sales expectations.

U.S. Economic News

With the more closely watched monthly jobs report looming, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended March 1st.

The report said initial jobless claims dipped to 221,000, a decrease of 21,000 from the previous week’s unrevised level of 242,000. Economists had expected jobless claims to edge down to 235,000.

Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 224,250, an increase of 250 from the previous week’s unrevised average of 224,000.

Reflecting a spike by the value of imports, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened by more than expected in the month of January.

The Commerce Department said the trade deficit surged to $131.4 billion in January from a revised $98.1 billion in December.

Economists had expected the trade deficit to jump to $123.0 billion from the $98.4 billion originally reported for the previous month.

The notably wider trade deficit came as the value of imports soared by 10.0 percent to $401.2 billion, while the value of imports increased by 1.2 percent to $269.8 billion.

At 10 am ET, the Commerce Department is scheduled to release its report on wholesale inventories in the month of January. Wholesale inventories are expected to increase by 0.7 percent.

The Treasury Department is due to announce the details of this month’s auction of thee-year and ten-year notes and thirty-year bonds at 11 am ET.

At 3:30 pm ET, Federal Reserve Board Governor Christopher Waller is scheduled to speak on the economic outlook at the Wall Street Journal CFO Network Summit.

Atlanta Federal Reserve President Raphael Bostic is due to participate in a conversation on the economic outlook with some focus on the Birmingham region at 7 pm ET.