Major United States benchmark averages climbed on Wednesday (Thursday AEST), buoyed by optimism over easing trade tensions between the United States and China and reassurances from President Donald Trump regarding Federal Reserve Chair Jerome Powell’s tenure.
The Dow Jones Industrial Average rose 419.6 points, or 1.1%, closing at 39,606.6. The S&P 500 gained 88.1 points or 1.7% to end at 5,375.9, while the Nasdaq Composite jumped 407.6 points or 2.5%, finishing at 16,708.1.
Investor sentiment was lifted after President Trump signalled a willingness to adopt a less aggressive posture in trade negotiations with China.
Speaking on Tuesday, Trump remarked that the current 145% tariff on Chinese goods is “very high” and pledged that it would be “substantially” reduced, though not eliminated entirely.
U.S. Treasury Secretary Scott Bessent echoed the positive tone, stating that both nations have the opportunity to strike a “big deal” on trade. “If they want to rebalance, let’s do it together,” Bessent said.
The prospect of eased trade restrictions triggered a rally in companies with significant exposure to China, notably Apple and Nvidia, which saw their shares climb by 2.4% and 3.9%, respectively.
Tesla also advanced 5.4%, benefitting from the improved trade outlook and comments from CEO Elon Musk.
During Tuesday’s earnings call, Musk said he would scale back his involvement in the so-called Department of Government Efficiency, a Trump-initiated project, starting next month.
In another positive development for markets, Trump indicated he has no intention of removing Fed Chair Jerome Powell, despite recent criticisms.
On the bond markets, 10-year yields eased 0.4% to 4.385%, and 2-year yields lifted 1.3% to 3.869%.
