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Stock market today: Dow, S&P 500, Nasdaq rally as Trump softens stance on Powell, China tariffs
- Stocks extended a two-day rally Wednesday as comments from President Trump eased investor concerns over an escalating trade war with China and risks to the independence of the Federal Reserve.
- On Tuesday night, Trump told reporters he has “no intention of firing” Federal Reserve Chair Jerome Powell, reversing a recent market narrative that had contributed to a nearly 1,000-point loss in the Dow Jones Industrial Average (^DJI) on Monday. In the same meeting with the press, Trump also hinted at a deescalation in a trade war with China, telling reporters the 145% tariffs on the country will “come down substantially.”
- The comments prompted some strategists to suggest that the president may now be watching and taking into account market reaction to his policies more than he did previously. The Trump administration had previously asserted they weren’t watching the stock market amid a massive sell-off.
- “Trump’s recent comments around Powell, his soothing words around China, all tell you that Trump is starting to ‘feel the market,'” Renaissance Macro head of economics Neil Dutta wrote.
- Read more here.
- Wall Street’s “sell America” trade showed signs of breaking down on Wednesday as US stocks roared higher in a broad-based rally sparked by easing trade tensions.
- Markets surged after a Wall Street Journal report said the White House is considering cutting tariffs on Chinese imports to as low as 50%, down sharply from the current 145%. The report added fuel to a rebound already underway following President Trump’s softer stance on trade and monetary policy.
- Treasury Secretary Scott Bessent later denied the Trump administration is considering unilaterally slashing tariffs on Chinese imports, which took some steam out of the rally.
- In the days leading up to Wednesday’s rebound, investors had been dumping both US stocks and traditional safe havens, with the 10-year Treasury yield (^TNX) spiking above 4.4% and the US dollar (DX-Y.NYB) sinking to its lowest level since 2022.
- The unusual move, pulling back from both risk assets and volatility hedges, is seen as a rare dislocation, with strategists dubbing it the infamous “sell America” trade. But those trends reversed sharply in early Wednesday trade: The 10-year yield dropped about seven basis points to around 4.3%, and the dollar edged closer to the psychologically important 100 level.
- Meanwhile, gold (GC=F), which had set several records in recent days as investors flocked to non-dollar-denominated, globally recognized stores of value, retreated on Wednesday to around $3,290 per ounce — further signaling that the “sell America” trade was winding down.
- In addition to favorable trade developments, Trump’s decision to backtrack on his attempt to remove Federal Reserve Chair Jerome Powell helped calm investor concerns.
- Read more here.
- Yahoo Finance’s Jennifer Schonberger reports:
- Read more here.
- Stocks moved off their session-highs late Wednesday morning as Treasury Secretary Scott Bessent told reporters there hasn’t been a unilateral offer from President Trump to cut tariffs with China.
- The S&P 500 (^GSPC) was up 2.2%, while the Dow Jones Industrial Average (^DJI) added roughly points, or over 1.75%. The Nasdaq Composite (^IXIC) led the gains, rising 3.1%. The tech-heavy index had been up over 4%.
- Housing activity for new residential construction climbed in March, spurred by a greater supply of homes during a crucial spring period.
- Sales of new homes rose 7.4% in March to a seasonally adjusted rate of 724,000 units, up from February’s rate of 676,000, according to the Census Bureau data released on Wednesday. The reading came in well above Bloomberg’s consensus forecast of 685,000.
- Inventory also ticked up, with 503,000 homes for sale at the end of March, a 0.6% increase from the prior month, and still the highest since 2007, according to Bloomberg.
- Still, many would-be buyers remain on the sidelines, deterred by high borrowing costs. Some measures show mortgage rates are approaching 7%, discouraging potential buyers.
- Home loan rates tend to track the 10-year Treasury yield (^TNX), which has risen recently as investors retreat from it as a traditional safe haven. The Trump administration’s tariffs and threats to fire Federal Reserve Chair Jerome Powell are causing a reassessment of US assets and a blow to investor confidence in the central bank’s independence.
- Adding to affordability challenges, house hunters are dealing with high home prices. The average sales price of a new home increased 1% to $497,700 in March.
- And affordability pressures may worsen. During its post-earnings call Tuesday, PulteGroup (PHM) cautioned that new tariffs could drive up construction costs by about 1% in the back half of the year.
- Tesla (TSLA) stock rose more than 8% after CEO Elon Musk said he would spend more time at Tesla and less time in Washington, D.C., news that overshadowed a challenging quarter for the company that saw results come in far below Wall Street forecasts.
- Still, Tesla’s bleak first quarter results left Wall Street split on the stock. Yahoo Finance’s Brian Sozzi reports:
- Read more here.
- The Nasdaq jumped 4% early Wednesday after the Wall Street Journal reported tariffs on Chinese imports could fall to a range of 50% to 65%, down from the current 145%.
- “Magnificent Seven” player Amazon (AMZN) was one of the best performers in early trade, leaping over 7%. Meta (META) rose around 6% on the news while shares of (NVDA) ticked up 4.3% and Microsoft (MSFT) climbed a more modest 3%.
- Chip players are especially exposed to China tariffs, so the report was a welcome relief to companies like AMD (AMD) and Intel (INTC), which jumped 8% and 6%, respectively.
- To note, the White House has yet to confirm the WSJ reporting.
- US economic activity continued to sink this month amid uncertainty around tariff policy.
- New data from S&P Global out Wednesday showed its flash composite PMI output index for April — which captures activity in the services and manufacturing sectors — fell to 51.2, the lowest in 16 months.
- Manufacturing activity rose to 50.7, up from 50.2 in March. Services activity fell to 51.4 from 54.4 in March. Readings above 50 indicate an expansion in activity in the sector; readings below 50 indicate contraction.
- Sentiment about the year ahead fell sharply, reaching the lowest level since July 2022 and the second-lowest since Sept. 2020.
- “The early flash PMI data for April point to a marked slowing of business activity growth at the start of the second quarter, accompanied by a slump in optimism about the outlook,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “At the same time, price pressures intensified, creating a headache for a central bank which is coming under increasing pressure to shore up a weakening economy just as inflation looks set to rise.”
- Read more here.
- China tariffs could fall from 145% to a range of 50% to 65%, according to the Wall Street Journal.
- Citing people familiar with the matter, the Journal reported the Trump administration is also considering a “tiered approach” where the US provides levies of 35% on items not deemed a “threat to national security.” Meanwhile, levies could be as high as 100% on items deemed “as strategic to America’s interest.”
- The report comes less than 24 hours after Trump said the final China tariffs aren’t expected to be 145%. Trump said he expects the levies to come down “substantially,” while Treasury Secretary Scott Bessent called them “unsustainable.”
- US stocks jumped Wednesday after President Trump said he has “no intention” of firing Fed Chair Jerome Powell, easing Wall Street fears over the central bank’s independence. Meanwhile, Trump also softened his tone on tariffs, hinting that eye-popping duty levels on Chinese imports would ultimately be scaled back.
- The S&P 500 (^GSPC) was up 2.5% while the Dow Jones Industrial Average (^DJI) added roughly 750 points, or 1.9%. The Nasdaq Composite led the gains, soaring 3.5%.
- The “Magnificent Seven” tech stocks led the rally. Amazon (AMZN) and Meta (META) both rallied roughly 6% while Nvidia (NVDA) added 4%.
- Treasury Secretary Scott Bessent is set to speak at 10 a.m. ET this morning, with markets closely listening for any clues as to where the Trump administration’s policies will head next.
- Amid the tariff back-and-forth, markets have responded far better to hearing from Bessent than other Trump officials. Research from Renaissance Macro’s head of economics, Neil Dutta, shows the S&P 500 (^GSPC) has fallen a combined 13.5 percentage points when comments from Secretary of Commerce Howard Lutnick or Trump adviser Peter Navarro were the leading story in the news.
- In contrast, the S&P 500 has risen one percentage point when Bessent is leading the headlines. Wednesday is already looking like a green day for markets with S&P 500 futures (ES=F) up more than 2% after President Trump said Tuesday he never planned to fire Fed Chair Jerome Powell and tariffs on China won’t be 145%.
- “Trump’s recent comments around Powell, his soothing words around China, all tell you that Trump is starting to ‘feel the market,'” Dutta wrote. “I’m not sure how long it lasts or when it stops (probably until the next bad hard [economic] data point), but it is welcome.”
- Boeing (BA) reported a smaller-than-expected loss on Wednesday as it attempts to recover from a series of quality and production challenges and navigate the US-China trade war.
- The stock rose 5% in premarket trading following the report.
- Boeing has been delivering more planes and plans to boost production of its 737 Max aircraft this year, Reuters reported. But supply chain snags have hampered those efforts.
- It has also become caught in the middle of the US and China’s trade spat after Beijing reportedly instructed Chinese air carriers not to accept any more plane deliveries from Boeing. Two of its planes bound for China’s Xiamen Airlines were returned to the US this week.
- And as turnaround efforts continue under new CEO Kelly Ortberg, Boeing announced it will sell portions of its Digital Aviation Solutions business, including its Jeppesen navigation unit, to Thoma Bravo for $10.55 billion as it looks to focus on its core business.
- Read more here.
- US stock futures flew higher during premarket trading on Wednesday as relief swept the markets after President Trump seemed to relent on some of his threats against Fed Chair Powell and his trade war with China.
- In addition to the “Magnificent Seven” stocks, which were all up, here are some individual movers surging premarket:
- Tesla (TSLA) stock popped 7% after CEO Elon Musk said he would reduce his hours at the Department of Government Efficiency (DOGE) and that the company’s cheaper electric vehicles were on track for production. The EV maker reported first quarter earnings that missed estimates for revenue and profit, which it blamed on trade uncertainty.
- Robinhood (HOOD) shares surged 8% as bitcoin (BTC-USD) rallied to $93,000 on President Trump’s softened stance on firing Fed Chair Powell and China tariffs. Other crypto-related stocks, such as Strategy (formerly MicroStrategy) (MSTR), were also up on Wednesday.
- Vertiv Holdings (VRT) stock soared 16% after the company, which makes cooling equipment for data centers, reported strong earnings and raised its guidance. Vertiv said its sales grew 24% year over year.
- GE Vernova (GEV) stock is up 6% after the gas turbine and energy equipment company reaffirmed its guidance, which included a $300 million-$400 million hit from tariffs that it plans to offset. GE Vernova topped earnings estimates as well, and the stock is up 25% in the last 12 months since it spun off from GE Aerospace.
- Yahoo Finance’s Myles Udland notes that, as expected, tariffs have become a central topic in earnings calls. He writes that the only question is about the magnitude of these increases, not their existence.
- More from the Morning Brief:
- Read more here.
- Economic data: S&P Global US manufacturing & Services PMI (April preliminary); New home sales (March); Fed releases Beige Book
- Earnings: Chipotle (CMG), Alaska Air Group (ALK), AT&T (T), Boeing (BA), GE Vernova (GEV), IBM (IBM), Las Vegas Sands (LVS), Newmont (NEM), NextEra Energy (NEE), O’Reilly Automotive (ORLY), Philip Morris International (PM), ServiceNow (NOW), Texas Instruments (TXN), Vertiv (VRT)
- Here are some of the biggest stories you may have missed overnight and early this morning:
- Americans expect tariff-driven price surge. Companies say they’re right.
- Trump: ‘I have no intention of firing’ Fed’s Powell
- Tesla stock climbs as Musk plans to cut time spent on DOGE
- Intel to announce plans this week to cut over 20% of staff
- Bitcoin surges as US seeks to ease trade, Fed tensions
- Dollar surges as Trump backs down from threat to fire Fed’s Powell
- Trump: ‘I’ll be very nice to China’
- AT&T leans on bundled plans to beat estimates for subscriber additions
- Gold drops as Trump’s softer stance on Fed and China ease fears
- Tesla (TSLA) stock rose 6% on Wednesday after CEO Elon Musk announced he would reduce his hours spent on DOGE, following the company’s first-quarter earnings report on Tuesday, which missed forecasts.
- Yahoo Finance’s senior reporter Pras Subramanian reports on Musk’s strategy to navigate Tesla’s challenges.
- Read more here.
- Bloomberg News reports:
- Bitcoin (BTC-USD) continued to climb after US President Donald Trump said he had no intention of firing Federal Reserve Chair Jerome Powell, easing concerns over the central bank’s autonomy.
- The largest cryptocurrency rose about 3% before trimming some gains to exchange hands at $93,804 at 7:28 a.m. in London on Wednesday. Smaller tokens including Ether, XRP and Solana also rose.
- Bitcoin topped $90,000 on April 22 in a sign it was breaking free of a longstanding tendency to move in the same direction as US stocks. But the token then rose in line with stocks and the dollar after Trump’s comments on Powell and amid optimism that trade tensions may be easing. Treasury Secretary Scott Bessent told a closed-door investor summit Tuesday that the tariff standoff with China cannot be sustained by both sides and that the world’s two largest economies will have to find ways to de-escalate.
- Read more here.
- Asian shares rose overnight Tuesday as concerns over Trump’s railing against the Fed’s Jerome Powell were abated by the announcement that the president had “no intention” of trying to remove the chair from his office.
- Read more here.
- Bloomberg reports:
- Read more here.
