Stocks soared higher on Wednesday as President Donald Trump signaled that he will ease tariffs on China to encourage more amicable trade talks and softened his stance on Federal Reserve Chair Jerome Powell.
The Dow Jones Industrial Average climbed more than 1,100 points in morning trade, but ultimately settled up 400 points, while the S&P 500 Index advanced nearly 2% and the Nasdaq Composite rallied about 2.5% higher.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Investor sentiment was lifted by Trump's comments late Tuesday at an Oval Office press conference, stating that he plans to be "very nice" to China in trade talks and that tariffs "will come down substantially, but won't be zero," referring to the United States' current effective tariff rate of 145% on most Chinese imports.
The Wall Street Journal reported on Wednesday that White House officials are considering a new trade policy that would tier tariffs on China -- imposing 35% duties on itsm not considered to be a threat to national security, but at least 100% on products that are, set to be phased in over five years. Another official familiar with the matter told the WSJ that the administration is likely to bring down China's overall tariff rate between 50% and 65%.
Trump also told reporters late Tuesday the he has "no intention" of firing Powell before his term ends in May 2026, marking a dramatic shift from his recent comments calling the central bank leader a "major loser," and saying that "if I want him out of [the Fed], he'll be out real fast," and his "termination cannot come fast enough."
Piper Sandler Chief Investment Strategist Michael Kantrowitz wrote in a note Wednesday that Trump's comments during a period of "heightened uncertainty," are "akin to the good CPI reports the markets rallied on during 2022 when the CPI was extremely high but beginning to incrementally improve."
"We still have a lot of uncertainty, tariffs remain very high, and we don't know which President Trump will show up next. But, markets are priced for incremental changes in the outlook and I see this as another positive change that markets can find relief," Kantrowitz continued, adding that he still sees "a market that is largely driven by macro forces (i.e., Trump policy rhetoric), causing large swings in sentiment like a pendulum going back and forth."
Wall Street is coming off of a strong session on Monday, which saw the Dow pop more than 1,000 points and the S&P 500 and Nasdaq adding over 2% each.
On the Earnings Front:
Tesla
The EV giant posted a total revenue decline of 9% year-over-year as its automotive revenue fell 20% to $14 billion from $17.4 billion in the same period last year. The company's net income also dropped 71% annually to $409 billion from $1.39 billion a year ago. In response to this performance, Tesla declined to provide a forward outlook, stating it will "revisit our 2025 guidance in our Q2 update."
In its shareholder deck, Tesla said that "uncertainty in the automotive and energy markets continues to increase as rapidly developing trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers," adding that "changing political sentiment," could have near-term impact on demand for its products.
Musk has faced criticism of his role at the White House as Tesla has lost roughly $600 billion in market cap since DOGE began its job cutting efforts across the U.S. government. Protests across the U.S. and Europe in response to Musk's support of far-right political parties have also dented demand for the company's vehicles.
DOGE has notably made cuts to oversight agencies including the U.S. Securities and Exchange Commission, Federal Aviation Admission and National Highway Traffic Safety Administration -- all of which have launched investigations into Musk's companies.
During Tesla's post-earnings call, Musk said will transition to spending a "day or two per week," at DOGE, "to make sure that the waste and fraud that we stop does not come roaring back.
Boeing
"While we are closely watching the developments in global trade, our strong start to the year combined with the demand for airplanes and our half trillion-dollar backlog for our products and services gives us the flexibility we need to navigate this environment," Boeing CEO Kelly Ortberg said in a staff note, quoted by CNBC.
Looking Ahead:
Market participants will turn their attention towards earnings reports from companies including International Business Machines Corporation
