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U.S. stocks opened sharply higher Wednesday, buoyed in part by President Donald Trump’s retreat on the prospect of firing Federal Reserve Chair Jerome Powell and his indication that tariffs on China “will come down substantially but it won’t be zero.”
The Dow Jones Industrial Average rose 1,052 points, or 2.7% shortly after the open. The S&P 500 added 3.1%, and the tech-heavy Nasdaq surged an eye-watering 4%.
Boeing and Tesla lead early gains
Boeing stock jumped 5% after reporting lower-than-expected first-quarter losses and reaffirming its full-year forecast, despite continuing trade tensions with China.
Tesla stock also climbed 5% following CEO Elon Musk’s comments that he would reduce his involvement in the Department of Government Efficiency (DOGE) to focus more on his company, even as the automaker reported a 71% drop in quarterly profits.
Markets rally as Trump backs off Powell threats
After days of escalating attacks, including calling Powell a “major loser” and saying his “termination cannot come fast enough,” Trump reversed course late Tuesday, telling reporters he has “no intention” of ousting the Fed chief. The remarks came after a series of dramatic market moves made clear that the price of firing Powell — or even threatening to — is measured in trillions.
Eyes on Bessent, Beige Book, and big earnings
Investors will be closely watching Treasury Secretary Scott Bessent’s scheduled speech Wednesday for further insights into the Trump administration’s trade policies and their potential impact. Investors will also be sifting through Tesla’s (TSLA) results and earnings from a packed slate of companies, including Boeing (BA) and AT&T (T).
Flash PMI data — early readings on the health of both the services and manufacturing sectors — land Wednesday morning, followed by the Fed’s Beige Book in the afternoon. Less about hard numbers and more about business vibes, the Beige Book distills anecdotal feedback on wages, hiring, and consumer demand. It’s a mood board for monetary policy.
After the close, IBM (IBM) rounds out the day with earnings that will shed light on its enterprise services and cloud business.
Philip Morris smokes estimates
Philip Morris International (PM) reported first-quarter results that exceeded expectations, with adjusted diluted earnings per share growing 12.7% to $1.69. Smoke-free products now account for a significant and rapidly increasing portion of revenue and profits — over 40% of both the top and bottom line.
Shares gained nearly 5% heading into the open.
Markets climb on trade optimism
Wednesday’s jump into the green followed Tuesday’s broad and sharp rally. The Dow surged 1,017 points Tuesday, or 2.7%, while the S&P 500 gained 2.5% and the Nasdaq climbed 2.7%. It was a dramatic rebound from last week’s selloff. The spark: Bessent’s reported comments that the U.S.-China tariff standoff is “unsustainable” and likely headed toward de-escalation.
That was all markets needed to hear — for now.