The S&P 500 ended slightly lower after Wednesday's volatile session as investors struggled to get a read on US trade policy after President Donald Trump promised hefty import tariffs but then said Mexico and Canada could be exempt. After falling as much as 0.97 per cent, the S&P regained ground after the White House appeared to add exceptions to its stated plan to slap import tariffs of 25 per cent on steel and 10 per cent on aluminium.

Worries about a potential trade war had intensified after free trade supporter Gary Cohn resigned from his position as Trump's top economic advisor late on Tuesday.

But late on Wednesday White House spokeswoman Sarah Sanders said Trump is expected to sign something by the end of the week with “potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well”.

“It makes investors less worried if the tariff isn't applied so broadly. But it’s speculation at this point. We have nothing in writing. If there's one thing we've learned from this administration it's that it could change by the time it's in writing,” Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

The Dow Jones Industrial Average fell 82.76 points, or 0.33 per cent, to end at 24,801.36, the S&P 500 lost 1.32 points, or 0.05 per cent, to 2,726.8 and the Nasdaq Composite added 24.64 points, or 0.33 per cent, to 7,396.65.

The Dow was dragged down partly by manufacturer stocks such as Caterpillar, which fell 1.5 per cent, and Boeing , which ended 0.5 per cent lower.

Energy stocks lose steam

Both those stocks have been under pressure since the tariff plan was first announced on Thursday as they could be hurt by both higher metal prices and any retaliatory trade barriers erected by foreign countries where they sell their products.

The S&P energy sector was one of the weakest of the S&P's 11 sectors with a 0.8 per cent drop as it was also weighed down by a 2 per cent drop in oil prices from data showing a rise in US inventories and output.

Small caps outperform

The Russell 2000 index, which tracks US small-cap stocks, outperformed the larger-cap indexes with a 0.8 per cent gain. Its more domestically focused companies are seen as having less exposure if foreign governments retaliate by slapping tariffs on US exports.

The S&P's technology index was also a bright spot with a 0.6 per cent increase. Its biggest boosts came from a 2.2 per cent increase in Facebook and a 14.9 per cent jump in shares of software supplier Autodesk after its quarterly report.

Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favoured advancers. The S&P 500 posted 14 new 52-week highs and three new lows; the Nasdaq Composite recorded 147 new highs and 19 new lows.

Volume on US exchanges was roughly 6.74 billion shares, compared to the 7.79 billion average for the last 20 sessions.

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