Stock market closes up ahead of Trump's 'Liberation Day' tariffs

U.S. stocks closed up on Wednesday ahead of President Donald Trump's announcement of sweeping tariffs, which the White House dubbed "Liberation Day."

The Dow Jones Industrial Average climbed 230 points, or 0.5%, while the S&P 500 rose 0.6%. The tech-heavy Nasdaq increased 0.8%.

The gains marked a reversal from losses earlier in the day, as investors weathered uncertainty about the details of Trump's announcement.

The S&P 500 and NASDAQ both posted their first quarterly losses since 2022 this week as investors prepared for the new measures and economists warned of the possibility of a recession -- with major potential knock-on effects for other economies around the globe.

Canada vowed Tuesday to respond with retaliatory tariffs if Trump slaps additional levies on Canadian goods.

Europe has a "strong plan" to retaliate against Trump's planned tariffs, Ursula von der Leyen, president of the European Commission, said in a speech on Tuesday.

Trump announced the new tariffs at the White House Rose Garden on Wednesday afternoon.

Abroad, the British FTSE 100 index dropped by more than 0.6% on Wednesday morning, with Germany's DAX index down by 1.2%. The French CAC 40 index was down more than 0.5%.

Japan's Nikkei index rose nearly 0.3%, but South Korea's KOSPI index dropped by more than 0.6%.

On Tuesday, the Dow Jones ended at 41,989.96 down 0.03%. The S&P 500 ended at 5,633.07 up 0.38% and the NASDAQ ended at 17,449.89 up 0.87%.

Automakers and pharmaceutical companies have reportedly been lobbying the Trump administration for carve outs and a phase-in approach for the promised tariffs.

World leaders have threatened a response while pressing the White House for clarity.