Fred Demarco, a trader, was seen working on the floor of the New York Stock Exchange on Wednesday, April 23, 2025. (Photo by Richard Drew/AP)
Wall Street had a strong rally on Wednesday, following a global market surge, as President Donald Trump softened his stance on trade tariffs and the Federal Reserve. The S&P 500 jumped 1.7%, adding to its previous day’s gains, while the Dow Jones Industrial Average climbed 419 points (1.1%), and the Nasdaq surged 2.5%.
Stock markets worldwide mirrored this upward movement, with major indexes in Europe and Asia also seeing significant gains. Investors have been navigating a rollercoaster ride in recent weeks, trying to interpret Trump’s unpredictable economic policies.
One major factor behind the market’s rally was Trump’s assurance that he has "no intention" of removing Federal Reserve Chairman Jerome Powell. Previously, Trump had harshly criticized Powell for not cutting interest rates aggressively, even calling him “a major loser.” Investors were worried that any action against Powell could threaten the Fed’s independence, leading to uncertainty in financial markets.
Trump’s softened rhetoric likely signalled to investors that he was trying to stabilize market confidence. Some analysts speculate that Trump may also want to keep Powell in place to have someone to blame in case of an economic downturn.
Adding to the market optimism, Trump hinted that U.S. tariffs on Chinese imports could be lowered "substantially" from the current 145%. “It won’t be that high,” he assured, sparking hope that negotiations between the U.S. and China could lead to a more favourable trade deal. Treasury Secretary Scott Bessent also fueled this optimism, suggesting that a major agreement could be on the horizon.
Wall Street has been closely watching these developments, as many investors believe a significant tariff reduction could help prevent a recession. U.S. businesses have already felt the impact of the trade war, with a recent report showing a drop in business activity to a 16-month low. The uncertainty surrounding tariffs has driven up costs for goods and services, raising concerns about inflation.
Despite the day’s market surge, experts warn that Wall Street is likely to remain volatile, with sharp swings driven by Trump’s unpredictable policies. Tim Waterer, chief market analyst at KCM Trade, noted that financial markets will likely continue to be dictated by Trump’s decisions on tariffs and trade.
The S&P 500, still 12.5% below its all-time high, has seen wild fluctuations this year, sometimes shifting dramatically within hours. Wednesday’s session alone saw the index gain 3.4% in the morning before settling at a more moderate increase by the end of the day.
Bond markets also reacted to Trump’s remarks, with Treasury yields easing. Earlier this month, a spike in Treasury yields had sparked fears that Trump’s economic policies were scaring investors away from U.S. bonds. The yield on the 10-year Treasury fell to 4.38% from 4.41% on Tuesday, briefly dipping as low as 4.26% in the morning.
Technology stocks played a major role in lifting the market. Nvidia rose 3.9% after rebounding from last week’s losses related to U.S. restrictions on chip exports to China. Other AI-related stocks, including Vertiv Holdings (up 8.5%) and Super Micro Computer (up 7.6%), also gained momentum.
Tesla also had a strong day, climbing 5.4% after CEO Elon Musk announced he would spend less time in Washington and focus more on running the company. The stock had been struggling amid backlash over Musk’s cost-cutting measures.
By the closing bell, the S&P 500 had added 88.10 points, ending at 5,375.86. The Dow Jones rose to 39,606.57, while the Nasdaq soared to 16,708.05. Global markets also experienced a surge, with indexes in France up 2.1%, Hong Kong up 2.4%, and Japan gaining 1.9%. The only exception was Shanghai, which saw a slight decline of 0.1%.
