Stan Choe, AP Writer
NEW YORK (AP) — U.S. stocks are rising Wednesday as global gatherings return to Wall Street after President Donald Trump backs back his criticism of the Federal Reserve and his harsh trade war stories.
The S&P 500 was 1.9% higher in afternoon trading, earning huge profits on Tuesday, making up for the sudden losses on Monday. The Dow Jones industrial average rose 539 points (1.4%) as of 12:42 pm east time, with Nasdaq composites 2.8% higher.
Wall Street profits have been strong in stocks in most of Europe and Asia. They’re also running up and down, eye-opening for the financial markets as investors struggle to see how they react to so much uncertainty about what Trump will do with his economic policies. The S&P 500 is about 12% below the record set earlier this year after falling around 20% below the mark.
The latest move in the market has risen in part as Trump said he had “no intention” to fire the head of the Federal Reserve late Tuesday. Trump was reluctant to cut interest rates and was pissed off by Jerome Powell, whom Trump called the “major loser.”
Reduction rates could boost the economy, but they could also put upward pressure on inflation. Economists say Trump’s tariffs are likely both to slow the economy and raise inflation at least in a short time.
Trump’s harsh stories have scared investors. Because the Fed is supposed to act independently without pressure from politicians, it can make the best decisions in the short term, but in the long term.
Trump may be aware of the market’s fears about the move towards Powell. According to Macquarie strategist Thierry Withman, he may also want to keep someone Trump can take responsibility for later in the event of an economy in a recession.
“It’s true that if the Fed actively cut policy rates, Trump would have little excuse for the recession apart from the purity of his tariff policy,” Wisman said.
Markets also rose late Tuesday after Trump said U.S. tariffs on imports coming from China could be “significantly” down from the current 145%. “It’s not that high, it’s not that high,” Trump said.
A hope along Wall Street was that Trump might lower his tariffs after negotiating trade deals with other countries, and Trump said Tuesday that he would not play hardball with Chinese President Xi Jinping, “very great” to the world’s second-largest economy.
“There’s a great opportunity here,” U.S. Treasury Secretary Scott Bescent said in a speech Wednesday morning.
If Trump lowers his tariffs sufficiently and quickly, investors believe the recession could be averted.
US companies say they already feel the effects of the trade war. A recent S&P Global survey released Wednesday found that preliminary readings of U.S. business activities have been 16 months lower as tariff threats helped boost prices of goods and services for more than a year.
That’s why one of the many predictions along Wall Street is that the sharp swing of the financial markets continues for a while. “We’re committed to providing a range of services to our customers,” said Tim Waterer, chief market analyst at KCM Trade.
Trump’s comments also had a major impact on the Treasury-eased bond market. This is a change from the beginning of this month. The Treasury Department has created fear that Trump’s actions will scare investors away from US investment and undermine the reputation of the US bond market as one of the safest places to maintain cash.
The 2010 Treasury yield fell from 4.41% to 4.37% in the second half of Tuesday.
On Wall Street, big technology helped lead the wider rally that most US stocks have climbed.
Nvidia rose 5% to curb many of the sudden losses that took last week, saying that restrictions on H20 chip exports to China could potentially undermine $5.5 billion in first quarter results. Chip Company’s stock was the strongest unitary force lifting the S&P 500.
Other stocks in the artificial intelligence technology ecosystem have also helped lead the way. Tracing its roots in the industry’s first manufacturer of computer room air conditioners, Vertiv Holdings rose 11.6% after reporting profits and revenues for the most recent quarter than analysts expected. He says demand from AI data centers continues to accelerate.
Super Micro Computer, a company that manufactures servers used in AI, has won 9.6% on one of the biggest profits of the S&P 500, which offers an AI platform for its customers.
Tesla has revolved 6.7% higher after CEO Elon Musk said he would spend less time in Washington and spend more time running an electric car company. Later Tuesday, Tesla reported a significant decline in profits. They struggle due to backlash against mask efforts to lead US government’s cost-cutting efforts.
In the overseas stock market, the index reached 2.1% in France, 2.4% in Hong Kong, and 1.9% in Japan. The Shanghai stocks were the exception, where they soaked 0.1%.
AP business writers Eurikeyama and Matt Ott contributed.
Original issue: April 23, 2025 8:51am EDT
