U.S. and European stock indexes gained on Wednesday after news that U.S. President Donald Trump planned to delay tariffs on auto imports, offsetting earlier pressure on equities and government bond yields from weak U.S. and Chinese economic data.
Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months, three administration officials told Reuters. Fears about an escalating global trade war, particularly following a spike in U.S.-China tensions, have rattled markets over the past week.
“Europe is on the brink of recession, and auto tariffs would almost certainly push it into recession,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. “President Trump announcing that he’d delay auto tariffs by as many as six months is positive, and stocks are reacting appropriately to that.”
Meanwhile, U.S. Treasury Secretary Steven Mnuchin said he will likely travel to Beijing soon to continue negotiations with Chinese counterparts as the world’s two biggest economies try to salvage talks aimed at ending their months-long trade war.