Investing.com-- U.S. stock index futures were little changed on Wednesday evening after Wall Street closed higher driven by President Donald Trump’s decision to grant a one-month exemption for automakers from the newly imposed 25% tariffs on imports from Mexico and Canada.

S&P 500 Futures were largely muted at 5,852.25 points, while Nasdaq 100 Futures inched 0.2% lower to 20,632.75 points by 19:25 ET (00:25 GMT). Dow Jones Futures were unchanged at 43,068.0 points.

Markets get respite as Trump defers auto tariffs

The White House announced on Wednesday a one-month exemption from the newly imposed 25% tariffs on vehicle imports from Mexico and Canada, offering temporary relief to U.S. automakers. 

This exemption allows manufacturers additional time to adjust their supply chains and explore long-term solutions, mitigating immediate financial pressures.

Both neighboring countries are integral to the North American supply chain, with numerous parts and vehicles crossing borders multiple times during production. The United States-Mexico-Canada Agreement (USMCA) underscores this relationship, setting content rules that many vehicles already comply with, and ensuring duty-free access.

Meanwhile, Bloomberg News reported that Trump is considering exempting certain agricultural products from the tariffs imposed on Canada and Mexico.

These developments suggest the administration may be open to negotiations for lasting tariff solutions.

The stock market responded positively to the exemption announcement. 

The Dow Jones Industrial Average closed 1.1% higher on Wednesday, ending a two-day losing streak. The S&P 500 also advanced by 1.1%, while the NASDAQ Composite climbed 1.5%. 

Notably, shares of major automakers jumped, with General Motors (NYSE:GM) advancing 7.2%, and Ford (NYSE:F) climbing 5.8%.

Stellantis NV (BIT:STLAM) shares surged 9.2%, while U.S.-listed Toyota Motor (NYSE:TM) shares jumped 6.5%.

Investors assess services activity data; key jobs report awaited

Data on Wednesday showed that the U.S. services sector experienced unexpected growth in February, with the Institute for Supply Management’s (ISM) Services PMI rising to 53.5 from January’s 52.8, surpassing forecasts. 

However, input prices also increased, exacerbated by new tariffs imposed by President Trump’s administration.

These tariffs, coupled with rising raw material costs at factories, suggest inflation may increase in the coming months. 

Investors are now keenly awaiting Friday’s employment report, to gauge the health of the U.S. economy, and the Federal Reserve’s future interest rate trajectory.

SEOUL (Reuters) - South Korea’s consumer inflation softened in February for the first time in four months, government data showed on Thursday, providing at least some relief to policymakers looking to further ease monetary policy.

The consumer price index (CPI) rose 2.0% from a year earlier, slower than a gain of 2.2% in the previous month, according to Statistics Korea. It was slightly higher than a median 1.95% increase tipped in a Reuters poll.

The slowdown in February came after inflation accelerated in January to a six-month high, driven by a weak won, and above the central bank’s medium-term target of 2%.

The won has strengthened 2% against the dollar this year to trade at 1,444.2 per dollar on Thursday, after weakening more than 12% last year for its biggest drop in 16 years on domestic political instability.

"Going forward, consumer inflation is expected to fluctuate around the target level amid mixed factors of a weak local currency and low demand pressure," the Bank of Korea said after the data release.

Last week, the central bank cut interest rates and said there would be more easing this year, steering Asia’s fourth-largest economy from a restrictive monetary policy stance towards an accommodative one to support growth.

CPI rose 0.3% on a monthly basis, compared with gains of 0.7% in the previous month and 0.2% expected by economists.

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The euro ascended to four-month highs on Wednesday against the U.S. dollar, as Europe’s growth prospects improved after Germany’s proposed 500 billion euro ($531 billion) infrastructure fund, potentially offsetting global trade tensions.

The greenback, on the other hand, fell against most currencies, weighed down by an uncertain growth outlook driven by fears about the impact of tariffs on inflation and the economy. Investors are now starting to price in the potential for outright U.S. contraction, with traders on the prediction market Kalshi currently implying a 42% chance of a U.S. recession this year.

"We are experiencing a change in sentiment when it comes to relying on American markets," said Juan Perez, director of trading, at Monex USA in Washington.

"If things are headed towards a restrictive protectionism, the financial system will start making adjustments and right now it seems shedding dollar positions is prudent. If tariffs and trade wars are perceived as negative on the American economy, we return to speculation over the chances for looser monetary policy."

The euro, meanwhile, climbed 4% this week, on track for its best week since November 2022, taking another leg higher after a late Tuesday announcement from the parties hoping to form Germany’s next government of the planned new fund and an overhaul of borrowing rules.

It rose to its highest since November 8 against the dollar and was last up 1.5% at $1.0791, on pace for its best daily gain since November 2023. The euro also gained against other currencies, including the British pound, the Japanese yen and the Swiss franc,.

Investing.com-- U.S. President Donald Trump repeated his plans for tariffs against America’s biggest trading partners during an address to Congress on Tuesday evening, calling for an end to what he saw as unfair trading practices. 

His comments came as Trump’s 20% tariffs on China and 25% tariffs on Canada and Mexico took effect earlier in the day, potentially marking the beginning of a global trade war. 

Trump said reciprocal tariffs against major economies- which will match their tariffs on U.S. exports- will take effect from April 2. He lambasted unfair trading conditions for U.S. companies, citing India and South Korea’s automobile duties as an example. 

“We’ve been ripped off for decades, and we will not let that happen any longer,” Trump said. “Tariffs are about making America rich again, making America great again.” 

Trump also said he wants to make interest payments on American-made automobiles tax deductible. 

Trump claimed that his policies will benefit American farmers, but warned that there would be a bit of an “adjustment period” after he announced tariffs on agricultural imports, beginning from April 2. 

In his first address to a joint session of Congress since taking office in January, Trump outlined what he touted as major achievements for his administration over the past six weeks, which included stricter border controls, measures to increase domestic energy production, and cuts to government spending. 

Trump reiterated his plans for sweeping tax cuts, calling on the Democrats to also vote in favor of a proposed tax cut bill. 

Investing.com-- Most Asian stocks rebounded on Wednesday amid hopes that U.S. President Donald Trump may negotiate the steep tariffs imposed on Mexico, Canada, and China, just a day earlier, while Australian shares declined despite data showing robust economic growth in the fourth quarter.

Regional equities also drew cues from a jump in U.S. stock index futures in Asia hours. Major U.S. stock indexes ended sharply lower on Tuesday after Trump’s announcement.

Asia stocks get respite from prospects tariff negotiations

On Tuesday, President Trump escalated trade tensions by imposing substantial tariffs on imports from Canada, Mexico, and China. 

A 25% tariff was levied on Canadian and Mexican goods, while tariffs on Chinese products were increased to 20%. 

These measures prompted swift retaliatory actions as Canada announced immediate 25% tariffs on U.S. imports worth C$30 billion, and China imposed 15% tariffs on U.S. agricultural imports, including chicken and wheat, along with 10% on products like soybeans and pork.

In an interview with Fox Business on Tuesday, U.S. Commerce Secretary Howard Lutnick indicated that President Trump might be open to negotiations to resolve the escalating trade disputes. 

This suggestion of potential dialogue introduced a degree of optimism in global markets.

Japan’s Nikkei 225 rose 0.5% on Wednesday, while TOPIX was largely unchanged.

Hong Kong’s Hang Seng index jumped 1.5%, rebounding from steep losses in the previous session.

Indonesia’s Jakarta Stock Exchange Composite Index jumped 2.9%, leading the gains among regional bourses. 

Singapore’s Straits Times Index gained 0.3%, while Malaysia’s KLCI index rose 0.6%.

South Korea’s KOSPI jumped 0.9%.

India’s Nifty 50 edged 0.2% higher at open on Wednesday.

Australia’s Q4 GDP grows more than expected

Data on Wednesday showed that Australia’s Gross Domestic Product (GDP) grew by 0.6% in the fourth quarter of 2024, surpassing the previous quarter’s 0.3% growth and exceeding market expectations of 0.5%. 

On an annual basis, GDP increased by 1.3%, up from 0.8% in the third quarter, driven by strong public and private investment, as well as a rebound in the terms of trade.

Despite the positive data, Australia’s S&P/ASX 200 index was trading 0.8% lower, as local investors were assessing the impact of tariffs on Australia’s biggest trade partner China.

China targets 5% GDP growth in 2025; parliamentary meeting in focus

China’s Shanghai Composite rose 0.3%, while the Shanghai Shenzhen CSI 300 index gained 0.4%. 

China has set a 2025 economic growth target of around 5%, media reports said, citing official documents. 

Premier Li Qiang will present it at the National People’s Congress, which began on March 5. 

Amid U.S. tariffs and trade tensions, China plans fiscal measures, including a higher budget deficit and 1.3 trillion yuan in special treasury bonds, reports stated.

China’s annual parliamentary meeting, also known as "Two Sessions", is being held from March 5 to March 11 this week in Beijing.

Investing.com-- Oil prices fell slightly in Asian trade on Wednesday as markets remained on edge over tariff-related headwinds and increasing global production, with focus turning to stimulus measures in top importer China. 

Prices had tumbled to a five-month low on Tuesday as investors fretted over worsening demand amid economic headwinds from increased U.S. trade tariffs. This came as U.S. President Donald Trump delivered on his threats of higher tariffs against China, Canada, and Mexico. 

Oil markets were also rattled by reports that the Organization of Petroleum Exporting Countries and allies (OPEC+) will proceed with a plan to begin increasing production, albeit marginally, from April.

Still, crude prices found some relief from China- the world’s biggest oil importer- setting a 5% economic growth target for 2025 while outlining a slew of stimulus measures. Industry data also showed a bigger-than-expected draw in U.S. inventories. 

Brent oil futures expiring in May fell 0.2% to $70.93 a barrel, while West Texas Intermediate crude futures fell 0.3% to $67.46 a barrel by 20:51 ET (01:51 GMT). Both contracts remained close to a five-month low hit earlier this week. 

China targets 5% GDP, outlines stimulus plans 

China set a gross domestic product target of 5% for 2025, keeping the figure unchanged for a third consecutive year.

The figure was revealed at the opening of the annual meeting of the National People’s Congress, China’s most important political meeting. 

Beijing outlined a higher budget deficit for 2025, heralding more fiscal spending, and also promised more action to boost local consumption, which has been a major point of pressure on local growth. 

Beijing will also ramp up its debt issuance in 2025 to allocate more resources towards consumer subsidies. 

US inventories see bigger-than-expected draw- API

 Data from the American Petroleum Institute showed that U.S. oil inventories shrank nearly 1.5 million barrels in the week to February 28, more than expectations for a draw of 0.3 mb. 

The reading usually heralds a similar print from official inventory data, which is due later on Wednesday. U.S. inventories shrank last week after four straight weeks of outsized builds.

But signs of a draw in the past week raised some hopes that fuel demand was improving and U.S. supplies were tightening. 

Oil prices were battered by Trump also calling on higher energy production, domestically and abroad. 

By Antoni Slodkowski

BEIJING (Reuters) - China kept its economic growth target for this year unchanged at roughly 5%, committing more fiscal resources than last year to fend off deflationary pressures and mitigate the impact of rising U.S. trade tariffs.

The target, which confirms a December Reuters report, was included in a government document prepared for the annual meeting of the National People’s Congress (NPC), China’s rubber-stamp parliament.

Premier Li Qiang will deliver a speech at the NPC later on Wednesday, detailing China’s policies for the rest of the year.

An escalating trade war with U.S. President Donald Trump’s administration is threatening to crimp China’s economic jewel, its sprawling industrial complex, at a time when persistently sluggish household demand and the unravelling of the debt-laden property sector are leaving the economy increasingly vulnerable.

Trump has also dangled tariffs at a long list of countries, including some which would consider themselves staunch U.S. allies, threatening a decades-old global trade order that Beijing has built its economic model around.

Pressure has been building on Chinese officials to introduce policies that put more money into consumers’ pockets and reduce the world’s second-largest economy’s reliance on exports and investment for growth.

China also aims for a budget deficit of 4% of gross domestic product (GDP) in 2025, up from 3% in 2024, showed the report, which promised a "special action plan" to stimulate consumption.

Beijing plans to issue 1.3 trillion yuan ($179 billion) in special treasury bonds this year, up from 1 trillion in 2024. Local governments will be allowed to issue 4.4 trillion yuan in special debt, up from 3.9 trillion.

From the central government’s special debt funds, 300 billion yuan will support a recently-expanded consumer subsidy scheme for electric vehicles, appliances and other goods.

Economists have been urging Beijing to engineer a long-term restructuring of resource allocation in the economy with more profound measures that reimagine its taxation, land and financial systems to weave a stronger social safety net.

"With deflationary pressures becoming entrenched against the background of an unfavourable external environment ... boosting domestic household consumption demand is a key priority," said Eswar Prasad, trade policy professor at Cornell University and a former China director at the International Monetary Fund.

"One-off schemes might help at the margin, but durable measures to provide income support and strengthen the safety net are essential."

Beijing also plans to use 500 billion yuan of the special debt funds to re-capitalise major state banks and 200 billion yuan on supporting manufacturing equipment upgrades.

INNOVATION DRIVE

China’s 5% growth rate last year, which the government only reached with a late stimulus push, was among the world’s fastest, but it was hardly felt at street level.

While China runs a trillion dollar annual trade surplus, many of its people are complaining of unstable jobs and incomes as their employers cut prices - and business costs - to stay competitive in external markets.

Chinese producers, facing weak demand at home and harsher conditions in the United States, where they sell more than $400 billion worth of goods annually, have no choice but to rush to alternative export markets all at the same time.

They fear this would intensify price wars, squeeze their profitability, and raise the risk that politicians in those new markets will feel compelled to erect higher trade barriers against Chinese goods to protect domestic industries.

Since Trump took office in January, his administration has so far added an extra 20 percentage points on existing import tariffs for Chinese goods, with the latest 10-point increment having kicked in on Tuesday.

"We worry that they will add another 10% and then another 10%," said Dave Fong, who manufactures school bags, talking teddy bears, stationery and consumer electronics in China. "That’s a big problem.”

China on Tuesday retaliated against the fresh U.S. tariffs.

Since the pandemic, China has primarily placed its future growth bets on what it calls "new productive forces" rather than on its 1.4 billion consumers, pouring resources into advanced manufacturing, hoping to close the technological gap with geopolitical rivals.

In the government report, Beijing pledged to continue supporting high-tech industries and improve investment efficiency.

Electric vehicle makers such as BYD (SZ:002594) and AI platform Deepseek have taken to the world stage with plenty of pizzazz.

But Alicia Garcia-Herrero, chief Asia Pacific economist at Natixis, says technological aspirations and consumer demand growth are "competing priorities" and finding a balance between them "will be crucial for China to avoid the prolonged stagnation experienced by Japan."

"The tangible impact of this innovation drive on growth, specifically through increased productivity, is not yet visible," she said.

"While industrial policy and technological advancement are important, China must address its fundamental imbalances."

($1 = 7.2651 Chinese yuan renminbi)

By Chibuike Oguh, Johann M Cherian and Sukriti Gupta

NEW YORK (Reuters) - U.S. stocks ended lower on Tuesday, with the tech-heavy Nasdaq veering near correction territory, as trade tensions escalated following U.S. President Donald Trump’s new tariffs on Canada, Mexico and China.

The 25% tariffs on imports from Mexico and Canada, along with doubled duties on Chinese goods, took effect on Tuesday. China and Canada retaliated while Mexican President Claudia Sheinbaum vowed to respond likewise, without giving details.

The Nasdaq Composite ended lower after veering into correction territory during the session but pared losses in choppy trading. The index closed down 9.3% from its record closing high on December 16.

"Equity valuations have been very elevated and there’s been yellow flags all over the horizon given moves to cut government spending," said Ben McMillan, chief investment officer at IDX Insights in Tampa, Florida. "Now on top of that, we have all this rhetoric around tariffs."

Shares in financials and industrials were the biggest losers among the benchmark S&P 500’s 11 main sectors.

Citigroup (NYSE:C) and JPMorgan Chase & Co (NYSE:JPM) fell 6.2% and nearly 4%, respectively, sending the bigger banks index down 4.7%.

The CBOE market volatility index rose 3.20% to its highest since December 20.

"The fear here is that it’s going to slow (economic) growth," said Adam Sarhan, CEO of 50 Park Investments in New York. "And when you have a slowdown in economic conditions, it’s a situation where banks specifically make less money because fewer goods and services are traveling through the economy."

The Dow Jones Industrial Average fell 670.25 points, or 1.55%, to 42,520.99, the S&P 500 lost 71.57 points, or 1.22%, to 5,778.15 and the Nasdaq Composite lost 65.03 points, or 0.35%, to 18,285.16.

Car makers Ford (NYSE:F) and General Motors (NYSE:GM), which have vast supply chains across North America, fell 2.9% and 4.6%, respectively. The domestically focused Russell 2000 index dropped 1%.

Wall Street is really concerned, McMillan said. "The likelihood of tariffs will lead to higher prices and therefore lower spending."

Target shares fell 3% after the retailer forecast full-year comparable sales below estimates.

Best Buy (NYSE:BBY) slumped 13.3% after the electronics retailer issued a downbeat forecast, while Walgreens jumped as a report hinted that the pharmacy chain is closing in on a take-private deal by Sycamore Partners.

Declining issues outnumbered advancers by a 2.97-to-1 ratio on the NYSE. There were 86 new highs and 450 new lows on the NYSE.

The S&P 500 posted 41 new 52-week highs and 43 new lows while the Nasdaq Composite recorded 35 new highs and 595 new lows.

Total volume across U.S. exchanges was 18.42 billion shares, compared with the 20-day moving average of 15.87 billion shares.

By Ariba Shahid

KARACHI (Reuters) -Pakistan's annual inflation rate slowed to 1.5% in February, the lowest in nearly a decade and below the finance ministry's estimates, data from the statistics bureau showed on Monday.

Inflation has cooled significantly, easing from 23.1% in February 2024.

Consumer prices in February fell 0.8% from the month before, according to the Pakistan Bureau of Statistics.

The South Asian country, currently bolstered by a $7 billion facility from the International Monetary Fund (IMF) granted in September, is navigating an economic recovery.

Authorities have credited inflation's downward trend to economic stabilization under a the IMF programme.

Pakistan's finance ministry, in its monthly economic outlook report released last week, predicted inflation would stabilize in February between 2.0-3.0%, continuing its downward trend from the previous year. The ministry also forecast a slight increase to 3.0-4.0% by March 2025.

"A favorable base effect from last year's high inflation contributed to this result. We anticipate an uptick in food inflation during Ramzan," said Waqas Ghani, head of research at JS Global, adding that the data was primarily driven by a decline in food inflation, with significant price drops in staples.

Investing.com-- China on Tuesday announced tariffs on U.S. goods and a slew of other trade measures in retaliation for an increased, 20% trade tariff imposed by U.S. President Donald Trump against the country. 

China’s finance ministry said it will impose tariffs of 15% on chicken, wheat, corn, and cotton imports from the U.S., while soybeans, sorghum, pork, beef, fruits and vegetables, aquatic products, and dairy will face a 10% tariff.

China’s Commerce Ministry added 15 U.S. entities to an export control list and added 10 U.S. firms to a list of unreliable entities. The measures will take effect from March 10. 

One of the companies targeted by Beijing was Illumina Inc (NASDAQ:ILMN), which is now banned from exporting gene sequencing machines to China. 

The retaliatory measures came as Beijing decried Trump’s decision to raise import tariffs on all Chinese goods to 20% from 10%. Trump’s increased tariffs came into effect from 00:00 ET (05:00 GMT) on Tuesday. 

Trump said the increased tariffs were aimed at pressuring China into stemming the flow of illegal substances, particularly fentanyl, into U.S. territory. Trump also imposed 25% tariffs against Canada and Mexico on similar grounds, while calling on the two to increase their border controls. 

Trump had imposed 10% tariffs on China in February, which had seen Beijing retaliate with its own tariffs and export controls. Tuesday’s tariffs, along with China’s retaliation, potentially mark the escalation of a trade war seen between the world’s biggest economies.

Trump’s first presidency was also marked by a bitter trade war with China, although tensions tapered off with the signing of a trade deal in 2019.

Washington and China have expressed interest in hashing out a new trade agreement in recent months. 

Trump’s new tariffs also come just before the beginning of a top-level government meeting in China this week. The country is expected to dole out more stimulus measures to help its economy weather the impact of higher tariffs.