Wall Street‘s main indexes rallied at the open on Wednesday after U.S. President Donald Trump dialed back on his threats to fire Federal Reserve Chair Jerome Powell and raised hopes for a trade deal with China.
The Dow Jones rallied 1,083.08 points or 2.76% to 40,270.06, the S&P 500 jumped 155.38 points or 2.94% to 5,443.13, and the Nasdaq surged 615.21 points or 3.77% to 16,915.63 at the opening bell.
Major indices had plunged on Monday after Trump blasted Federal Reserve Chair Jerome Powell on social media for not moving quickly to cut interest rates.
Trump’s broadside on Monday added to worries Trump would seek to fire or replace Powell, a move of uncertain legality that would shock investors accustomed to the US tradition of having an independent central bank.
But Trump’s latest comments buoyed the market.
“I have no intention of firing him,” Trump said Tuesday.”I would like to see him be a little more active in terms of his idea to lower interest rates — it’s a perfect time to lower interest rates.”Those remarks were accompanied by more optimistic messaging from the White House about trade talks with China.
The U.S. government is considering cutting its tariffs on Chinese imports in a bid to de-escalate tensions with Beijing, the Wall Street Journal reported on Wednesday.
The China tariffs are likely to come down to between 50% and 65%, the report added citing a White House official.
“There is definitely a sigh of relief in the markets over both of these comments,” said LBBW’s Karl Haeling.
But the market is aware that Trump’s “tough rhetoric could come back at any time,” Haeling added.
Tesla shot up 4.2 percent despite reporting weaker than expected earnings as CEO Elon Musk announced he would shift his attention back to the electric carmaker, reducing his time spent on Trump’s so-called Department of Government Efficiency.
Boeing rose 6.6 percent as it reported a smaller than expected loss while confirming 2025 targets to raise commercial plane production.