Wall Street Rallies on Hopes of Progress in U.S.-China Trade Relations
Philip Morris gained more than 2.2% after the tobacco giant posted strong Q1 results and raised its profit forecast for 2025.
Quick overview
- Investor sentiment improved as President Trump reassured that he does not plan to fire Fed Chair Jerome Powell.
- All three major Wall Street indexes saw significant gains, with the Dow rising 1.07%, the S&P 500 up 1.67%, and the Nasdaq climbing 2.50%.
- Market optimism was fueled by reports of potential tariff reductions on Chinese goods, although no final decision has been made.
- Earnings season is progressing well, with 75% of S&P 500 companies exceeding Wall Street estimates, and notable gains were seen in stocks like Tesla and Intel.
Investor sentiment improved on Wednesday as concerns eased over the independence of the Federal Reserve, following President Trump’s statement that he does not intend to fire Fed Chair Jerome Powell.
All three major Wall Street indexes climbed sharply. Investors were encouraged by signs of potential progress in trade tensions between the U.S. and China, as well as reassurances about the Fed’s autonomy.
The Dow Jones Industrial Average, which tracks 30 major corporations, rose 1.07% to 39,606.57 points. The S&P 500, composed of the largest U.S. companies, gained 1.67% to 5,375.86, while the tech-heavy Nasdaq Composite jumped 2.50% to 16,708.05.
Markets were lifted by media reports suggesting that the U.S. may be considering reducing tariffs on Chinese goods to ease tensions. President Trump added to the optimism by stating he does not intend to remove Jerome Powell from his post at the Federal Reserve.
However, the rally lost some momentum after it was clarified that no final decision had been made. White House Press Secretary Karoline Leavitt confirmed that a more conciliatory approach toward China has not yet been adopted.
Washington Developments Drive Early Gains
Much of the market’s initial strength stemmed from political developments in Washington, including Trump’s remarks about Powell and speculation about possible tariff cuts.
Meanwhile, Q1 earnings season continues to progress. As of now, 110 S&P 500 companies have reported results, with 75% surpassing Wall Street estimates, according to LSEG. Overall earnings for the index are projected to grow 8.4%.
Among major stocks, Tesla rose 5.37% despite reporting weaker-than-expected quarterly results. The rally was driven by news that Elon Musk will significantly scale back his involvement in government affairs starting in May.
Intel shares surged 6% after Bloomberg reported the chipmaker plans to cut over 20% of its workforce to streamline operations and reduce bureaucratic inefficiencies.
Philip Morris gained more than 2.2% after the tobacco giant posted strong Q1 results and raised its profit forecast for 2025.
Boeing climbed 6% as the aircraft manufacturer reported its first quarterly revenue growth since 2023.
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