US stocks rebounded sharply on Wednesday, bouncing back after two days of significant declines as investor optimism grew following the White House’s decision to delay tariffs on automakers. The Dow Jones Industrial Average surged nearly 500 points, recovering some of the heavy losses from earlier in the week, while both the S&P 500 and Nasdaq Composite climbed more than 1%. Positive sentiment was buoyed by signals from the Trump administration suggesting further tariff concessions may follow, offering relief to sectors heavily impacted by recent trade uncertainties. European markets also gained, driven by Germany’s planned debt policy overhaul, while Asian markets reacted positively to China’s revised economic growth targets despite ongoing trade tensions. However, concerns about slowing US employment growth lingered, keeping investors cautious.

Key Takeaways:

  • Dow Rebounds by Nearly 500 Points Amid Tariff Optimism: The Dow Jones Industrial Average surged 485.60 points, or 1.14%, to finish at 43,006.59, staging a strong comeback after losing over 1,300 points during the previous two trading sessions. Investor confidence improved significantly after the Trump administration announced a one-month delay on tariffs for automakers compliant with the United States-Mexico-Canada Agreement (USMCA), spurring hopes of additional tariff exemptions.
  • S&P 500 and Nasdaq Post Strong Gains as Tech Sector Recovers: The S&P 500 climbed 1.12% to close at 5,842.63, driven by widespread gains across multiple sectors, with approximately three-quarters of its constituents finishing the day higher. The tech-heavy Nasdaq Composite outperformed, rising 1.46% to 18,552.73, as key technology stocks like Microsoft and Tesla rallied sharply, recovering from significant selling pressure experienced earlier in the week.
  • European Stocks Rally as Germany Plans Fiscal Reforms: European equity markets ended the session higher, lifted by optimism that Trump’s tariffs on Canada and Mexico could be eased and Germany’s announcement of plans to reform its constitutional debt rules. The pan-European Stoxx 600 Index closed up 1%, with Germany’s DAX surging 3.5%, or 789 points, on expectations of increased defence and infrastructure spending. Meanwhile, France’s CAC 40 climbed 1.88%, and Italy’s FTSE MIB rose 2.18%, while the UK’s FTSE 100 slightly underperformed, dipping 0.04%.
  • Asian Markets Mostly Higher on China’s Revised GDP Target: Asia-Pacific indices broadly advanced Wednesday as investors assessed China’s new economic targets amidst continuing trade tensions. Hong Kong’s Hang Seng Index led gains, rising 2.8%, while China’s mainland CSI 300 index increased 0.45%. In Japan, the Nikkei 225 gained 0.23%, and South Korea’s Kospi rose 1.16%, although Australia’s S&P/ASX 200 bucked the trend, falling 0.70%. Investors welcomed China’s GDP growth target of around 5% for 2025, coupled with reduced inflation expectations of approximately 2%.
  • Weak Private Payroll Data Fuels US Economic Slowdown Fears: Private-sector job creation in the US slowed sharply in February, as companies added only 77,000 jobs—well below expectations of 148,000 and significantly lower than January’s upwardly revised figure of 186,000, according to payroll firm ADP. This disappointing data raised investor concerns over a potential slowdown in economic momentum, although an unexpectedly strong ISM Services PMI reading of 53.5, beating forecasts of 52.9, somewhat mitigated these fears.
  • Treasury Yields Climb as Investors Weigh Tariff Implications: The benchmark 10-year Treasury yield increased by approximately 7 basis points to 4.282%, while the 2-year yield climbed nearly 5 basis points to 4.003%. Investors evaluated the impact of Trump’s tariffs on Canada, Mexico, and China, alongside mixed economic signals from weaker private payrolls and stronger-than-expected service-sector activity data, creating continued volatility in bond markets.
  • Oil Prices Drop Over 2% as OPEC+ Output Plans Add to Demand Concerns: Oil markets extended losses for a third consecutive day, with Brent crude futures falling $1.65, or 2.32%, settling at $69.39 per barrel, and West Texas Intermediate (WTI) crude declining $1.88, or 2.75%, closing at $66.38 per barrel. Investors remained concerned over planned OPEC+ output increases scheduled for April, alongside rising trade tensions triggered by Trump’s recent tariffs, which intensified worries about global oil demand.

FX Today:

  • EUR/USD Jumps to Multi-Month Highs on US Dollar Weakness: The EUR/USD pair surged on Wednesday, closing at 1.0796, up sharply from the day’s opening low of 1.0601. The currency gained momentum as the US dollar weakened following mixed US economic data and tariff-delay optimism. Immediate resistance now lies at the psychological barrier of 1.0800, a break above which could encourage further upside momentum. On the downside, key support is positioned around the 1.0700 area, with a failure to maintain current levels potentially triggering a pullback toward this region. Overall sentiment remains cautiously bullish amid tariff uncertainties and positive Eurozone Composite PMI data, which matched expectations at 50.2.
  • GBP/USD Jumps Higher as BOE Signals Tighter Monetary Policy: GBP/USD climbed sharply, closing the session up 0.82% at 1.2899 after Bank of England policymaker Megan Greene indicated that monetary policy might remain restrictive for longer. The British pound found solid support amid broad-based US dollar weakness, sparked by tariff exemption news. Momentum strengthened further as traders weighed recent positive retail sales data from the UK, showing a 1.7% month-over-month gain, exceeding forecasts of 0.4%. GBP/USD now stands comfortably above key moving averages, with immediate support at the 100-day SMA level of 1.2629, while next upside resistance is near 1.3000.
  • AUD/USD Rebounds Strongly on Improving Risk Sentiment: The Australian dollar rose firmly against the greenback on Wednesday, as AUD/USD climbed to finish at 0.6342, gaining significantly from the session’s low of 0.6233. The currency pair found support as the US dollar broadly weakened and risk sentiment improved amid easing tariff concerns, closing near session highs. Immediate resistance now sits at the 100-day SMA of 0.6382, with a sustained break opening the door for further upside towards the 200-day SMA at 0.6537. Immediate downside support lies at the 50-day SMA at 0.6260.
  • USD/CAD Slips Below 1.4400 Amid Trade and Economic Concerns: The USD/CAD pair finished lower at 1.4336, down 0.35% after reaching an intraday high of 1.4449. Canadian dollar strength returned modestly amid cautious optimism over potential tariff delays, offsetting bearish Canadian economic data as Canada’s Services PMI sank to a five-month low of 46.6, indicating growing business activity contraction due to trade-war fears. The pair now has key support near the 50-day SMA at 1.4344, with any sustained move below this potentially opening a deeper downside towards the 100-day SMA at 1.4181.
  • Gold Prices Firm Modestly Amid Lingering Tariff Uncertainty: Gold prices steadied on Wednesday, closing modestly higher at $2,922, marking a 0.20% gain. Earlier in the session, gold touched a low of $2,894 before recovering to reach a session high of $2,929. Safe-haven demand remained solid amid continuing uncertainty about Trump’s tariff policies, especially related to automobile imports. The 50-day SMA at $2,787 remains supportive below the current price, while immediate resistance is at $2,930. A clear break above could target the psychologically significant $2,950 level, whereas immediate support stands at the critical $2,900 area.

Market Movers:

  • Moderna Surges as CEO Buys Shares: Moderna shares rallied sharply, jumping 15.9% after CEO Stephane Bancel disclosed purchasing roughly 160,000 shares worth approximately $5 million on March 3.
  • Stellantis Leads Automaker Gains Amid Tariff Delay: Stellantis shares climbed 9.2% after the White House announced a one-month delay on auto tariffs linked to compliance with the USMCA trade agreement. General Motors and Ford also rose significantly, advancing 7.2% and 5.8%, respectively, as investor fears eased.
  • Abercrombie & Fitch Falls Sharply on Weak Sales Forecast: Shares of Abercrombie & Fitch tumbled 9.2% after the retailer forecasted 2025 sales growth of just 3% to 5%, well below analyst expectations of 6.8%. 
  • CrowdStrike Drops After Soft Guidance: CrowdStrike shares fell 6.3% after providing first-quarter revenue and operating income guidance below analyst estimates. The cybersecurity company expects full-year revenue between $4.74 billion and $4.81 billion.
  • Novo Nordisk Gains on Price Cut Announcement: Shares of Novo Nordisk rose 3.8% after announcing plans to offer its weight-loss drug Wegovy at less than half its usual price through a direct-to-consumer online pharmacy. 

Stocks rebounded strongly on Wednesday, with the Dow Jones Industrial Average climbing nearly 500 points and both the S&P 500 and Nasdaq posting robust gains as investors welcomed news of a one-month delay on US tariffs for automakers. The announcement sparked optimism for further tariff concessions, partially easing fears from recent sessions. European markets also finished higher, notably in Germany, where stocks rallied amid planned fiscal reforms and increased defence spending. In Asia, markets rose on China’s revised economic growth and inflation targets, although ongoing trade tensions kept sentiment cautious. Meanwhile, disappointing private-sector employment data highlighted lingering economic risks, underscoring continued uncertainty heading into the coming trading sessions.