Wall Street Rallies as Trump Softens Tone on Tariffs and Fed Chair Powell

US stock markets rebounded on Wednesday after Donald Trump struck a more moderate tone on trade and voiced support for Federal Reserve Chair Jerome Powell—calming investors and fueling optimism.

The Dow Jones Industrial Average (DJIA) surged 877 points (2.2%), the S&P 500 rose 2.7%, and the Nasdaq led the way with a 3.5% jump—marking one of the best days on Wall Street in recent weeks.

The boost came after Trump, speaking at a private economic forum, said he had no intention of replacing Fed Chair Jerome Powell, easing concerns over potential political interference in the central bank's independence. “He deserves a chance to finish his term,” Trump remarked, signaling a more hands-off approach.

"I have no intention of firing him," Trump said Tuesday while addressing reporters in the Oval Office.  "I would like to see him be a little more active in terms of his idea to lower interest rates," he said.

Also Read: Trump Eases Off Fed Chair Powell: What It Means for Investors? | Republic World

Trump also hinted at the possibility of lowering tariffs on Chinese goods, provided trade talks continue to make headway. “We’re looking at something fair and reciprocal,” he said—sparking hopes of relief from long-standing trade tensions that have rattled markets.

Investor sentiment turned sharply positive, especially in the tech space. Nvidia and Vertiv Holdings saw heavy buying, and Tesla gained over 5% after CEO Elon Musk vowed to refocus on core operations.

Despite the upbeat session, some economic concerns persist. Business activity in the US recently hit a 16-month low, and inflation continues to pressure households and companies alike. Reflecting the caution, the 10-year Treasury yield dipped to 4.31%, a sign that investors remain wary about future growth.

Despite the positive sentiments, analysts see the rally as a timely morale boost. “This was more about tone than data,” said one strategist. “Markets needed reassurance—and they got some.”