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(Reuters) – U.S. stock index futures rose on Wednesday, bouncing back from a selloff in the previous session, after a top official said President Donald Trump could ease tariffs he has imposed on the country’s top trade partners.
Late on Tuesday, Commerce Secretary Howard Lutnick said Trump, who has imposed 25% tariffs on Canada and Mexico, is considering granting some relief on imports, such as cars and autoparts, that comply with the U.S.-Mexico-Canada free-trade agreement.
In premarket trading, Ford rose 2.6%, General Motors added 5.4% and Tesla gained 1.8%, after logging sharp declines in the previous session.
“If Lutnick’s comments about giving relief on tariffs for Canada/Mexico holds, it would ease some of our concerns,” said Mohit Kumar, chief Europe economist at Jefferies.
Investors also welcomed Trump’s commitment to extend his 2017 tax cuts, which has buoyed market sentiment since his election victory in November. He reiterated his tax cut plans in an address to Congress on Tuesday, where he said “America is back”.
At 05:28 a.m. ET, Dow E-minis were up 242 points, or 0.57%, S&P 500 E-minis were up 36.5 points, or 0.63%, and Nasdaq 100 E-minis were up 151.5 points, or 0.74%.
Futures tracking the domestically focused Russell 2000 index rose 1.2%.
Trump escalated a global trade war on Tuesday as he imposed tariffs on top trade partners, citing ineffective border controls. Analysts expect his policies to fan inflation pressures, slow the economy and eat into corporate profits, at a time when multiple reports have suggested a cooling economy.
The benchmark S&P 500 has fallen about 6% from its record high, while the tech-heavy Nasdaq has come close to confirming a 10% drop from its peak.
On the data front, ADP’s national employment report and ISM’s services sector survey will be in focus later in the day. The Fed is also slated to unveil its beige book at 2:00 p.m. ET, that will throw light on the impact tariff uncertainty has had on the world’s largest economy.
Traders now see the central bank lowering borrowing costs for the first time this year in June, according to data compiled by LSEG.
Megacaps such as Amazon.com and Meta advanced about 1% each.
Chipmakers Nvidia rose 1.4% and Broadcom jumped 2%, while Intel climbed 1.1%. Investors assessed Trump’s remarks as he said lawmakers should get rid of a landmark 2022 bipartisan law on subsidies to the semiconductor industry.
Crowdstrike fell 8.2% after the cybersecurity firm forecast first-quarter revenue slightly below estimates, due to weak spending on its cybersecurity products.
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