By Pranav Kashyap

(Reuters) - Canada’s main stock index recovered on Wednesday, helped by the news of U.S. President Donald Trump’s administration considering reducing the stringent tariffs on Canadian and Mexican imports.

At 10:20 a.m. ET (1520 GMT), the S&P/TSX composite index was up 0.5% at 24,677.07, after falling in the past two sessions.

U.S. Commerce Secretary Howard Lutnick said on Tuesday the government was contemplating easing the 25% tariffs on Canadian and Mexican imports for products that adhere to the trade pact negotiated with the two nations during Trump’s first term.

Trump was weighing possible sectors, such as automobiles, that could see some potential relief, Lutnick said during an interview on Bloomberg TV.

An announcement concerning the tariffs was expected later in the day, he added.

"People are anticipating that maybe the U.S. will back off on tariffs a little bit. Right now, the markets are back up, but if they fall through then it could go right back down," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

"It’s all being politically driven and until we get a better sense, we’re in for more volatility."

Trump escalated a global trade war on Tuesday after he imposed the tariffs on top U.S. trade partners, citing ineffective border controls.

On the economic data front, Canada’s PMI data fell to 46.6 in February from 49 a month earlier, revealing a deepening downturn in the country’s services sector.

Meanwhile, U.S. private payrolls posted their slowest growth in seven months in February.

Sector-wise, materials emerged as the standout performer on Wednesday, climbing 1.7% as copper prices rose amid intensifying concerns over U.S. import tariffs.

China’s new stimulus measures, Germany’s infrastructure fund plans and a weaker dollar also boosted the metal’s broader market. [MET/L]

The energy sector slipped 1.6%, becoming the day’s worst performer, as oil prices tumbled over 2% amid worries about OPEC+’s plans to proceed with output increases in April. [O/R]