U.S. stocks rallied sharply on Wednesday after President Donald Trump eased tensions on two major market concerns - Federal Reserve leadership and U.S.-China trade relations.
The S&P 500 climbed 1.7%, while the Dow Jones Industrial Average added 1.1% and the tech-heavy Nasdaq Composite surged 2.5%. The gains followed Trump's statement that he has "no intention" to remove Jerome Powell as Federal Reserve Chairman, marking a stark reversal from his recent criticism where he called Powell "a major loser."
Market sentiment was further boosted when Trump indicated that tariffs on Chinese imports could be reduced "substantially" from their current 145% level. "It won't be that high, not going to be that high," Trump said, suggesting a more conciliatory approach to trade negotiations with China.
Treasury Secretary Scott Bessent reinforced the positive outlook, noting "There is an opportunity for a big deal here" regarding U.S.-China trade relations.
Technology stocks led the market higher, with Nvidia rising 4.3% as investors reconsidered recent concerns about China export restrictions. Other AI-related companies also saw strong gains, with Vertiv Holdings jumping 9.5% and Super Micro Computer advancing 8.8%.
Tesla shares rose 7.5% after CEO Elon Musk announced he would focus more on running the electric vehicle company and reduce his time in Washington.
The market rally extended globally, with major indexes in France rising 2.1%, Hong Kong gaining 2.4%, and Japan advancing 1.9%.
However, market analysts cautioned that volatility could continue as investors react to ongoing policy uncertainties. The S&P 500 remains more than 12% below its recent record high, reflecting persistent investor concerns about economic conditions and policy direction.