Wall Street was set to open higher on Thursday as fears of a global trade war ebbed following signs that President Donald Trump’s proposed hefty import tariffs on steel and aluminum could exclude key trading partners.
Markets fell sharply on Wednesday following the resignation of chief economic adviser Gary Cohn, a strong advocate of free trade, on concerns the move would make it more easier for Trump to push ahead with his plans.
But Wall Street’s main indexes recovered after a White House spokeswoman said Trump’s tariffs plan may include “potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well.”
“Anything that would suggest a little bit of a roll back from the tariffs is viewed as positive,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Trump said in a tweet on Thursday he would hold a meeting at 3:30 pm ET over his planned tariffs and that the United States must show flexibility toward its allies.
The plan has faced strong opposition from most of key partners, with Europe and China warning they would respond in the event of a trade war with the United States.
By 8:31 am ET, Dow e-minis were up 10 points. S&P 500 e-minis rose 5.75 points and Nasdaq 100 e-minis were up 32.25 points.
Among stocks, Express Scripts soared 17% after health insurer Cigna agreed to buy the pharmacy benefits manager for $54-billion deal. Cigna shares slipped 5.6%.
Kroger fell 5% after the supermarket chain issued a disappointing full-year profit forecast.
American Eagle Outfitters rose 3.3% as sales at established stores topped analysts’ estimates for the holiday shopping quarter.
A Labour Department report showed initial jobless claims rebounded from a more than 48-year low last week, but the trend continued to point to robust labour market conditions.
A comprehensive reading on jobs and wage is expected on Friday. The average hourly earnings is expected to slow to 2.8% in February on an annualised basis, from 2.9% in January.
Investors are worried that higher wages could lead to faster interest rate increases by the Federal Reserve and make borrowing expensive for companies.