The major North American stock indexes rallied late in the day from earlier lows, as it appears the White House’s plans to put punitive tariffs on imported steel and aluminum will have loopholes after all.
The Dow Jones Industrial Average, which was down by more than 300 points at one point, rallied in the afternoon to close at 24,801, down 82 points.
The catalyst was a series of pronouncements from the White House late in the day that the administration was open to “carve-outs” on its looming steel and aluminum tariffs, notably to Canada and Mexico, its NAFTA trading partners, on national security grounds.
“If we can work something out with Canada and Mexico they will be exempted,” Commerce Secretary Wilbur Ross said. “It’s not inconceivable that others could be exempted on a similar basis.”
White House press secretary Sarah Huckabee Sanders said the White House might make an announcement on the tariff exemptions this week, and some reports suggest it could come as early as Thursday.
Whenever it lands, the suggestion that the metal tariffs won’t be as iron-clad as first suggested came as a relief to markets, as the plan late last week had sent markets lower as investors feared reciprocal actions that could set off a trade war.
“There is more of a political worry that has crept back into the market,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
“It’s not just the tariffs, but the broader White House changing … all those things are undercurrents which are affecting market sentiment in the near-term.”
All the major indexes were lower on Thursday, before staging a mini rally through the latter half of the day. Based on how things stand as of the close, most of them are back to about where they were before the tariff idea was floated.
The broader S&P 500 lost barely more than one point to close at 2,726. The technology-laden Nasdaq finished higher by 24 points, or 0.33 per cent higher, at 7,396.
In Canada, the TSX closed down 72 points at 15,472.