- Global markets came under pressure after news emerged that the White House's Chief Economic Advisor Gary Cohn had resigned from President Trump's administration.
- Stocks and bond yield rebounded later in the day after White House Press Secretary Sarah Sanders suggested Mexico and Canada could be exempt from tariffs.
U.S. government debt yields rose slightly Wednesday after the White House suggested that Canada and Mexico could be exempt from tariffs on steel and aluminum.
The yield on the benchmark 10-year Treasury note was lower at around 2.888 percent at 3:48 p.m. ET, while the yield on the 30-year Treasury bond was slightly higher at 3.156 percent. Bond yields move inversely to prices.
Yields ticked upward late Wednesday afternoon after White House Press Secretary Sarah Sanders said that the U.S. may exempt Canada and Mexico from tariffs on imported steel and aluminum.
Questioned about whether the Trump administration would consider exemptions from tariffs, Press Sec. Sanders left the possibility open.
"We expect that the President will sign something by the end of the week. And there are potential carve-outs for Mexico and Canada based on national security and possibly other countries as well based on that process," she said at a press briefing Wednesday. "That will be a case by case and country by country basis. It would be determined whether or not there is a national security exemption."
President Trump announced a 25 percent tariff on steel and 10 percent tariff on aluminum last Thursday, sparking criticism from Capitol Hill to Wall Street. Proponents of free trade, including House Speaker Paul Ryan, have advised the president that the move could have widespread implications for the broader market.
The debate on tariffs seemd to peak Tuesday after White House Chief Economic Advisor Gary Cohn chose to resign from President Donald Trump's administration. News of his impending departure initially weighed on equities and bond yields alike.
Cohn, the free trade advocate and former Goldman Sachs president, chose to step down from his position after Trump announced that he would impose tariffs on steel and aluminum imports, a move that has frustrated Capitol Hill and Wall Street alike.
"The Cohn exit creates more uncertainty with regard to economic policy. ... Markets do not like uncertainty," said Gary Pollack, head of fixed-income trading at Deutsche Bank Private Wealth Management. "This will remove some support from risky assets like equities and it should add some support to bonds."
Cohn was widely respected for his market knowledge and pro-trade view; equity futures sank following the announcement of his exit, with the Dow Jones industrial average set to fall triple digits.
"Cohn has been a voice of moderation, he's been a voice of who understands markets, who understands investors, a voice that's committed to U.S. playing a leadership role in the global system," said Nathan Sheets, chief economist at PGIM Fixed Income. "In addition, he's been a counterweight to others in the administration who have pushed for protectionist policies and other policies that may potentially disrupt U.S. trade."
In economic news, February proved another strong month for job creation, with companies adding 235,000 positions, ADP and Moody's Analytics reported Wednesday. The total beat Wall Street expectations, as economists surveyed by Thomson Reuters were expecting payrolls to grow by 195,000.
— CNBC's Tae Kim contributed to this report.