Stocks surged worldwide on Wednesday after U.S. President Donald Trump reassured investors he had no plans to fire Federal Reserve Chair Jerome Powell and signaled steep cuts to U.S. tariffs on Chinese imports.
Markets had tumbled earlier in the week amid fears that Trump might oust Powell, whom he recently branded a “major loser” and “Mr. Too Late” for not slashing interest rates fast enough. Analysts warned that removing Powell would threaten the Fed’s independence and trigger global economic instability.
But on Tuesday, Trump addressed the rumors directly: “I have no intention of firing him.” He added, “I would like to see him be a little more active… it’s a perfect time to lower interest rates. If he doesn’t, is it the end? No.”
His comments, coupled with hints of a more cooperative tone on trade with China, gave markets a much-needed boost.
Trump acknowledged U.S. tariffs on Chinese goods—currently as high as 145%—were “very high” and would “come down substantially,” though not to zero. This followed remarks from Treasury Secretary Scott Bessent, who said the tariff standoff with China was “not sustainable” and hinted at de-escalation.
White House Press Secretary Karoline Leavitt added, “The president and the administration are setting the stage for a deal… the ball is moving in the right direction.”
Meanwhile, Chinese President Xi Jinping condemned tariffs and trade wars, saying they “hurt the multilateral trading system and impact the world economic order.” Despite tensions, China’s Foreign Ministry stated, “the door for talks is wide open.”
Market Reaction
Investors responded positively. Tech-heavy Hong Kong markets climbed, boosted by gains in Alibaba and Tencent. Tokyo, Sydney, Seoul, Singapore, and other major Asian markets also rallied. European markets in London, Paris, and Frankfurt followed suit.
Taipei’s index jumped over 4%, driven by a 7% rise in chipmaker TSMC. Shanghai edged slightly lower.
Gold, which spiked to a record $3,500 amid earlier uncertainty, dipped to around $3,300. Oil prices gained more than 1% as economic fears eased.
On Wall Street, all three major indexes soared over 2%. Chris Weston of Pepperstone noted that Trump’s reassurance on Powell helped ease investor fears, adding, “The mood in the market is evidently shifting.”
The rally came despite the IMF cutting its global growth forecast to 2.8% for the year, citing the negative impact of U.S. tariff policies.
Corporate Highlights
Japanese firm Sumitomo Rubber, recent acquirer of the Dunlop brand, rose 3.7% after announcing it would raise tire prices in North America by up to 25%.
Key Market Data (as of 08:10 GMT):
- Nikkei 225 (Tokyo): +1.9% at 34,868.63
- Hang Seng (Hong Kong): +2.4% at 22,072.62
- Shanghai Composite: -0.1% at 3,296.36
- FTSE 100 (London): +1.4% at 8,445.62
- Dow Jones (New York): +2.7% at 39,186.98
- Gold: $3,300
- WTI Crude: +1.5% at $64.63/barrel
- Brent Crude: +1.4% at $68.41/barrel
- Forex:
- Euro/Dollar: $1.1385
- Pound/Dollar: $1.3305
- Dollar/Yen: 141.85
