Wall street rally fueled by Trump's car tariff overhaul
The Tuesday session on Wall Street ended with gains, with the S&P 500 and Dow marking their sixth consecutive day of profits. This represents the longest streak since July for the Dow and November for the S&P 500. The increases can be attributed to hopes for tariff policy easing by President Donald Trump.
The Dow Jones Industrial rose 0.75%, closing at 40,527.62 points, while the S&P 500 increased by 0.58%, ending the day at 5,560.83 points. The mid-cap index, Russell 2000, grew by 0.49% to 1,975.33 points.
US Commerce Secretary Howard Lutnick revealed that President Donald Trump would sign an executive order easing car tariffs later that day. According to the new regulations, cars assembled in the USA with less than 15% foreign parts will be exempt from the tax.
American car tariffs: White House changes stance
As the secretary explained to reporters, the new regulations, introduced less than a month after tariffs on imported cars, aim to encourage automakers to relocate production and the automotive parts supply chain to the USA. Previously, cars produced in the USA were taxed based on the percentage of foreign components. Now, they are exempt from tariffs if they consist of at least 85% American parts.
Additionally, Lutnick announced that automakers would also receive a 15% rebate on the costs of imported parts, which are expected to increase in price due to tariffs. Manufacturers will also be exempt from paying other tariffs, including those on steel and aluminum, as well as 10% tariffs on most other goods.
"Until we find some resolution on the trade front, I think little else will matter," said Ross Mayfield, an investment strategist at Baird, noting that the S&P 500 index could trade between 5,100 and 5,700 points while investors await trade progress.
The American consumer confidence index fell to 86 points in April from 93.9 points a month earlier, after revision, according to the Conference Board report. Analysts had expected the index to be 87.7 points.
The number of job openings in the USA, according to the JOLTS survey in March, was 7.192 million compared to 7.48 million recorded a month earlier, after a revision from 7.568 million. It was expected that the number of available positions would be 7.49 million.
