Thomas Daniels
U.S. Equity Markets Rebound as Trump Softens China Trade Stance and Backs Powell
U.S. equity indices closed firmly in the green on Wednesday, buoyed by a perceived de-escalation in trade tensions with China and signs of stability at the Federal Reserve. The Dow Jones Industrial Average gained 419 points, or 1.07%, while the broader S&P 500 advanced 1.6%. The Nasdaq Composite led the rally with a 2.5% surge, driven by renewed strength in technology stocks.
Earlier in the session, the Dow was up over 1,100 points, but gains moderated as trading progressed.
Investor sentiment improved significantly following President Donald Trump’s remarks suggesting he does not intend to dismiss Federal Reserve Chair Jerome Powell, despite recent public criticism. Trump also indicated a potential reduction in the punitive 145% tariffs on Chinese imports, describing forthcoming adjustments as “substantial,” albeit short of full elimination.
No Immediate Concessions to Beijing
Treasury Secretary Scott Bessent, however, tempered expectations by confirming that no unilateral proposal had been offered to Beijing. He emphasized the importance of reciprocal measures, suggesting that a comprehensive agreement could be achievable through mutual rebalancing initiatives.
Tech firms with significant exposure to Chinese markets were among the primary beneficiaries. Apple Inc. climbed 3%, Nvidia Corp. rose 4%, and Tesla Inc. added 5%, bolstered by CEO Elon Musk’s announcement to scale back his involvement in a governmental advisory role.
Caution Amid Optimism
Despite the day’s gains, caution lingers among analysts. BCA Research warned that recession risks remain underappreciated, citing softening labor market indicators and declining business investment. Piper Sandler echoed this cautious optimism, forecasting a short-term truce on tariffs rather than a comprehensive resolution.
Cryptocurrency Markets Also Rise
In parallel, Bitcoin prices advanced approximately 2.5%, reaching near $93,700. The digital asset mirrored broader market optimism, suggesting a potential appetite for riskier assets in light of easing geopolitical tensions.
While Wednesday’s gains offered some respite, analysts advise a measured approach given ongoing macroeconomic uncertainties and inconsistent policy signals.
