U.S. stocks climbed Wednesday, buoyed in part by President Donald Trump’s retreat on the prospect of firing Federal Reserve Chair Jerome Powell and the president’s indication that tariffs on China “will come down substantially but it won’t be zero.”
The president said he won't fire the Fed chair after days of attacks, while Wall Street digested a fresh round of earnings
U.S. stocks climbed Wednesday, buoyed in part by President Donald Trump’s retreat on the prospect of firing Federal Reserve Chair Jerome Powell and the president’s indication that tariffs on China “will come down substantially but it won’t be zero.”
The Dow Jones Industrial Average closed up 420 points, or 1.1%, after climbing by more than 1,000 points earlier in the day. The S&P 500 added 1.7%, and the tech-heavy Nasdaq $NDAQ surged 2.5%.
Boeing $BA (BA) stock jumped 6% after reporting lower-than-expected first-quarter losses and reaffirming its full-year forecast, despite continuing trade tensions with China.
Tesla $TSLA (TSLA) stock climbed 5.3% 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.
After days of escalating attacks from Trump on the Fed chair, including calling Powell a “major loser” and saying his “termination cannot come fast enough,” the president 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.
Investors closely watched Treasury Secretary Scott Bessent’s speech for further insights into the Trump administration’s trade policies and their potential impact. At a keynote address at the Institute of International Finance in Washington, D.C. Bessent urged China to move away from “export-led manufacturing growth,” which he said is harming both China and the entire world.
Speaking to reporters following his remarks, Bessent, a champion of tariffs, said Trump is not considering unilaterally lowering the tariffs imposed on China ahead of any negotiations with Xi Jinping, China’s leader. However, he added, “I don’t think either side believes that the current tariff levels are sustainable.”
“This is the equivalent of an embargo and a break between the two countries on trade does not suit anyone’s interest,” Bessent told reporters.
Investors also sifted through earnings from a packed slate of companies on Wednesday, including AT&T $T (T), which rose 0.9% after beating Wall Street expectations.
Flash PMI data — early readings on the health of both the services and manufacturing sectors — landed 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.
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 2.5% Wednesday.
—Kevin Ryan contributed to this article.
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