Jamie Spencer
U.S. stocks surged on Wednesday following President Trump’s comments that he has “no intention” of firing Federal Reserve Chair Jerome Powell, easing investor concerns about the central bank’s independence. Additionally, Trump softened his stance on tariffs, suggesting that the high duty levels on Chinese imports might eventually be reduced.
Wall Street Reacts to Positive Sentiment
The S&P 500 rose by 2.2%, while the Dow Jones Industrial Average added approximately 600 points, or about 1.6%. The Nasdaq Composite led the gains, rising 3.1%. At one point, the Nasdaq was up over 4%, though it later moderated after Treasury Secretary Scott Bessent stated that there had been “no unilateral offer from the president to deescalate” the ongoing trade war with China.
Trump’s Tone Shifts on Tariffs and Powell
Despite the moderation in gains, investor optimism was largely bolstered by Trump’s softer tone on tariffs and the Federal Reserve. On Tuesday, Trump indicated that he expected Chinese tariffs to be reduced “substantially,” following comments from Bessent, who called the tariffs “unsustainable.” Trump also addressed his prior comments about Powell, telling reporters from the Oval Office that he “never did” intend to remove the Fed chair, though he reiterated his desire for lower interest rates. This shift in rhetoric helped calm fears of escalating tensions between the President and the Fed, which had previously sent stocks into a tailspin.
Market Reaction to Tech and Crypto Stocks
Tesla stock saw a boost of over 6% after posting its quarterly earnings report, which had missed Wall Street expectations. Despite the earnings miss, shares rose after CEO Elon Musk revealed plans to “significantly” reduce his involvement with DOGE, the meme cryptocurrency. In addition, other tech stocks saw notable gains: Nvidia rose by over 5%, while Amazon and Meta both climbed more than 5%.
