U.S. Secretary of Commerce Howard Lutnick hinted on Wednesday that a decision regarding the 25% tariffs imposed on Mexico and Canada could be made later on that afternoon, suggesting a possibility for a compromise.
Lutnick stated that adjustments could be possible, such as exempting certain products from tariffs,
In this context, U.S. President Donald Trump is expected to speak with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum.
As the possibility of a compromise in the trade war emerges, the New York Stock Exchange, which had been plummeting for two days, has stopped its decline and is now showing mixed results as investors observe the situation.
Compromise in the Middle
According to the Wall Street Journal (WSJ), Lutnick told Bloomberg TV on Wednesday morning, “I believe a compromise will happen somewhere in the middle,” adding that it would not be a complete 100% tariff on all products or a total exemption but something in between.
However, Trump has remained silent about plans to ease the 25% tariffs on Canada and Mexico and the additional 10% tariffs on China.
Nevertheless, with Trump scheduled to speak with Sheinbaum and Trudeau on the same day, expectations are rising for a potential compromise.
New York Stock Market Rebounds
The New York Stock Exchange is attempting a rebound.
During the morning session, the Dow Jones Industrial Average, S&P 500, and Nasdaq experienced a brief surge.
However, momentum has waned as the afternoon approached, with the S&P 500 and Nasdaq reversing to declines of 0.2%, while the Dow remained slightly up by 0.04%.
Big tech stocks of M7, including Amazon, Microsoft (MS), and Meta, showed gains, but Nvidia, Tesla, Apple, and Alphabet faced losses.
Notably, Apple has dropped more than 2%.
The Nasdaq, heavily weighted towards tech stocks, has fallen nearly 10% from its recent peak and is approaching bear market territory. Its 200-day moving average has already been broken, leading to a pessimistic outlook.
When the 200-day moving average is breached, it raises concerns about a weakening long-term growth momentum.
According to Bespoke Investment Group, the Nasdaq had not breached its 200-day moving average for 333 trading days until Monday.
