Stocks on Wednesday pared heavy losses triggered by concern that a trade war sparked by President Donald Trump's proposed tariffs is more likely after the resignation of Gary Cohn, the president's top economic adviser.
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The Dow Jones Industrial Average fell 82.76 points, or 0.33%, to 24,801.36, recovering more than 250 points from session lows. The S&P 500 ticked 1.32 points lower, or 0.05%, to 2,726.80. The Nasdaq Composite climbed for the fourth straight session, rising 24.64 points, or 0.33%, to 7,396.65.
Cohn, a former Goldman Sachs executive, was considered to be Wall Street’s voice in the White House on many issues, such as tax reform and import tariffs.
Trump said last week he intends to levy tariffs on imported steel and aluminum, leading to speculation that Cohn, who opposes the plan, would step down from his post.
Cohn was working on organizing a meeting between Trump and CEOs who are urging the administration to reconsider its position on tariffs.
“The initial market reaction should be very negative both because it signals that the Trump administration is absolutely going to move forward with tariffs and the risk of a trade war is now more elevated, as well as the loss of a market-savvy and well-regarded voice of reason within Trump’s inner circle,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance.
Meanwhile, there was another positive reading on the U.S. jobs market. Before opening bell, ADP reported that the U.S. added 235,000 private sector jobs in February. Analysts polled by Reuters were expecting 195,000 new jobs in the month. The ADP report is a prelude to the Labor Department’s nonfarm payrolls count, due on Friday.
U.S. trade deficit rose in January by 5% to $56.6 billion, its highest level since October 2008. Such deficits have been frequently mentioned by Trump as a reason for tariffs.
In commodities, U.S. oil futures fell $1.45, or 2.3%, to $61.15 a barrel. Gold was trading about 0.7% lower.
Ken Martin contributed to this report.