US stocks gain on Trump pausing auto import tariffs on Canada and Mexico

Trump administration will halt auto tariffs from Mexico and Canada for one month.
Dow Jones, NASDAQ, S&P 500 jump more than 1%.

Clay Webster FXStreet

The US stock market lurched upward in the mid-afternoon session on Wednesday after US President Donald Trump offered a one-month pause on 25% tariffs on vehicle imports manufactured in Canada and Mexico.

The Detroit automakers rallied on the news. Ford (F) stock shot up 5%, while General Motors (GM) stock lifted 7%, and Stellantis (STLA) spiked 9%.

As part of the deal, announced during an afternoon press conference by White House Press Secretary Karoline Leavitt, vehicles that are part of the USMCA trade agreement signed under President Trump’s first term will be exempt from the 25% tariff on goods from Mexico and Canada for one month.

"The President is giving them an exemption for one month, so they are not at an economic disadvantage," Leavitt said.

The deal echos Trump's one-month delay on Canada-Mexico tariffs at the beginning of February.

This sent the rest of the US stock market higher as many expect that Trump might be lenient on other parts of the US economy as well. Some think the tariffs will slowly fade away as President Trump enacts new bilateral trade deals with multiple nations.

The Dow Jones Industrial Average (DJIA) has gained 1.2% on the news, while the NASDAQ has climbed 1.4%. The S&P 500 is slightly trailing the first two indices.

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.