Stocks on the New York Stock Exchange surged on hopes of easing U.S.-China trade tensions and President Trump’s reassurance that Federal Reserve Chair Jerome Powell’s position is secure. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posted gains, although they retreated from their session highs. Trump’s willingness to adopt a less confrontational approach in trade talks with China buoyed investor sentiment.
Market analysts welcomed the potential de-escalation in trade tensions, emphasizing the importance of a cooling down in U.S.-China trade rhetoric. The Wall Street Journal reported the White House’s consideration of reducing China tariffs, which lifted stocks with high exposure to the Chinese market. Companies like Apple, Nvidia, and Tesla saw significant gains amidst the positive trade news.
Investors also found relief in Trump’s statement that he has no intention of firing Powell, a stark reversal from his recent criticisms of the Fed chair. This assurance, coupled with the optimism surrounding trade talks, contributed to the market’s positive momentum. Analysts at BMO Capital Markets advised investors to maintain discipline and stay the course amid recent market volatility.
While the market rallied on Trump’s softened stance on trade and Powell, concerns linger about potential economic headwinds. BCA Research highlighted signals of a possible U.S. recession, citing deteriorating indicators and the impact of trade shocks on earnings and profitability. UBS, however, remained bullish on the economy in the long term, foreseeing growth resuming as the economy adapts.
Elsewhere, BTIG suggested that gold’s rally may have reached an inflection point, cautioning of potential downside risks as the metal’s price consolidates. Wolfe Research anticipated further market volatility driven by economic releases and trade deal developments, advising defensive positioning in sectors like consumer staples and utilities.
In the midst of trade uncertainties, the iShares MSCI Mexico ETF hit an 8-month high, indicating investor optimism despite ongoing trade negotiations. Piper Sandler downgraded Oracle, citing increased scrutiny on AI investments and the stock’s decline in 2025. Treasury Secretary Scott Bessent reiterated the U.S.’s commitment to a strong dollar policy and highlighted the potential for a significant trade deal with China.
The market’s response to Trump’s comments and trade developments underscores the interconnected nature of global economic forces and policy decisions. As investors navigate ongoing uncertainties, market volatility is likely to persist, with opportunities and risks emerging in various sectors based on geopolitical developments and economic indicators.