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US stocks rallied 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 3%, while the Dow Jones Industrial Average (^DJI) added roughly 1,000 points, or over 2.5%. The Nasdaq Composite (^IXIC) led the gains, soaring 4.2%.
The rally took another leg higher after the Wall Street Journal reported that China's tariff rate is expected to fall from 145% to 50%-65%.
Trump told reporters from the Oval Office on Tuesday that he "never did" intend to remove Powell, though he reiterated his desire for the Fed chair to reduce interest rates. "I would like to see him be a little more active in terms of his idea to lower interest rates," the president said.
Trump's comments marked a clear softening in tone toward Powell, offering relief to investors who had feared a growing rift between the two could add to uncertainty in a market already shaken by tariffs.
As recently as Monday, Trump had called the Fed chair a "major loser," causing stocks to tank. Last week, the president said Powell's termination couldn't come "fast enough."
Wall Street was also upbeat thanks to new signs that trade talks between the US and major trading partners might advance.
On China tariffs, Trump said he expects them to come down "substantially," while Treasury Secretary Scott Bessent called them "unsustainable." Vice President JD Vance also said talks with India had made progress.
Read more: The latest on Trump's tariffs
Tesla (TSLA) stock popped 5% Wednesday after posting quarterly earnings following Tuesday's closing bell. The EV maker missed Wall Street estimates, but its shares rose after CEO Elon Musk revealed he would 'significantly' reduce the time he spends on DOGE.
Other notable movers on Wednesday included bitcoin (BTC-USD), which extended gains past $94,000. Nvidia (NVDA) also rose over 5% on Wednesday. Meanwhile, Amazon (AMZN) rallied more than 7% while Meta (META) popped more than 5%.
Corporate earnings season continues today, with results due from Boeing (BA), Chipotle (CMG), IBM (IBM), and AT&T (T).
LIVE 14 updates
Tech names soar on China tariff deescalation report
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 output hits 16-month low in April, expectations crater
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.
"US business activity growth slowed to a 16-month low in April, according to flash PMI survey data, with business expectations about the year ahead also dropping to one of the lowest levels seen since the pandemic," S&P Global said in a release.
"Prices charged for goods and services meanwhile rose at the sharpest rate for just over a year, with an especially steep increase reported for manufactured goods, linked to tariffs."
"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."
China tariffs could come down to 50% to 65%: WSJ reports
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."
'Magnificent Seven' stocks roar at the open
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%.
Intel stock surges as chipmaker reportedly plans to cut 20% of workforce
Markets have a favorite member of the Trump administration
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 stock pops 5% as turnaround efforts continue
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.
Trending tickers this morning: Tesla, Robinhood, Vertiv, GE Vernova
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.
Americans are expecting a tariff-fueled price surge. Corporate America says they're right.
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:
Good morning. Here's what's happening today.
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 stock climbs as Musk plans to cut time spent on DOGE
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.
Bitcoin surges as US seeks to ease trade, Fed tensions
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.
Global shares jump on hopes tariff war may subside
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.
Oil rebounds following Trump's declaration of 'no intent' to fire Fed's Powell
Bloomberg reports:
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