Investing.com - Canada’s most followed stock indexes opened modestly higher Wednesday after slumping to a seven-week low on Tuesday after U.S. President Trump imposed 25% tariffs on goods from its northern neighbor and a lower 10% tariff on oil products. The upside follows news from U.S. Commerce Secretary Howard Lutnick that Trump may announce a compromise with Canada and Mexico on the tariffs soon, adding that the president would be willing to meet the traditional U.S. trading partners "in the middle."

The benchmark S&P/TSX Composite traded up 59 points, or 0.2%, shortly after the open. The S&P/TSX 60 index traded up 3.3 points, or 0.2%.

Yesterday, Prime Minister Justin Trudeau announced that Canada would respond with 25% tariffs on C$155 billion worth of U.S. goods starting Tuesday. Canada will impose 25% tariffs on C$30 billion worth of U.S. items starting Tuesday, with tariffs on the remaining C$125 billion in products set to take effect in 21 days.

"Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures," Trudeau stated.

The reciprocal tariff announcement from Canada prompted Trump to warn of even higher potential tariffs.

"Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!” Trump said on a social media post on Tuesday.

In addition to the Canada tariffs, Trump announced that 25% tariffs would go into effect Tuesday on Mexico, and an additional 10% tariff would be applied to China, bringing their rate to 20%.

U.S. stocks open modestly higher

In the U.S. on Tuesday, the benchmark S&P 500 traded up 0.2% and the 30-stock Dow Jones Industrial Average gained 0.2%. The tech-heavy Nasdaq Composite also rose 0.2%.

Private sector employment data in the U.S. showed the job market continues to cool, which could be viewed positively for the inflation picture. ADP (NASDAQ: ADP ) reported that private employers added 77,000 jobs in February, well below the 140,000 expected.

Oil falls again

Oil prices fell Wednesday, dropping for the third day in a row on tariff-related headwinds and increasing global production. At 9:30 AM ET, Brent oil futures fell 1.8% to US$69.51 a barrel, while West Texas Intermediate crude futures dropped 1.9% to US$66.44 a barrel.

Gold

Gold was relatively flat Wednesday after seeing sharp gains on Tuesday. Gold futures fell 0.07% to US$2918.34.

(Scott Kanowsky contributed to this article)