Equity markets surge in response to trade tariff updates and President Trump's stance on Federal Reserve rates shift.
Stock Market Surges: Trump's Softer Stance on Tariffs and Fed Policy Lifts Investor Sentiment
On a typically active Wednesday, April 23, 2025, the U.S. stock market experienced a significant upswing. This upward shift was, in part, attributable to President Donald Trump's more conciliatory comments regarding tariffs and Federal Reserve policy, which ignited optimism among investors. The technology sector - particularly chip stocks - spearheaded the rally, with companies such as ServiceNow and Microchip Technology recording impressive gains.
The Dow Jones Industrial Average climbed a robust 2.2%, managing a near 900-point increase, while the benchmark S&P 500 soared 2.7%. The tech-heavy Nasdaq Composite opened more than 3.6% higher as strong earnings and positive investor sentiment bolstered the markets. Notable gainers in the pre-market trading included tech giants like Tesla (TSLA), Nvidia (NVDA), Palantir Technologies (PLTR), and Apple (AAPL). While IBM, Boeing, and AT&T were under the spotlight as they unveiled their corporate earnings for the day.
The rally followed President Trump's declaration that he has "no intention" of dismissing Fed Chair Jerome Powell. This news was met with a positive response on Wall Street, setting the stage for a bullish market. However, the Powell situation and Trump's stance were not the only factors driving investors' attention. Fears surrounding the impact of the ongoing trade war continued to linger.
Trump also assured reporters that he will not fire Powell. Despite expressing a desire for the central bank chief to approach interest rates differently, this announcement put an end to a week of apprehension and uncertainty following Trump's criticisms of Powell.
In addition to the stock market, cryptocurrencies also enjoyed a bullish day. Bitcoin's price surged more than 4% to exceed $94,000, prompting several altcoins to record double-digit gains. The positive momentum in crypto was largely due to positive news emerging from trade talks between the U.S. and its key trading partners.
Following a series of pooling stock market performances and direct connections to trade tensions, the market's reaction saw the 10-year Treasury yield dip by 10 basis points to 4.274%. Meanwhile, the 2-year Treasury yield dipped by 3 basis points to 3.783%.
As trade talks continue to unfold, investors will undoubtedly remain vigilant, closely watching any developments that could impact the ongoing trade war and, by extension, the global stock market.
[1] Source: Reuters, CNBC, Bloomberg
- Despite the bullish stock market and Trump's reassurances about Jerome Powell, a lingering nervousness regarding the ongoing trade war continues to exert its influence.
- In the realms of finance and business, the tech sector was the day's star performer, with the Dow Jones, S&P 500, and Nasdaq Composite all recording significant gains.
- Nervousness in the stock-market landscape was notably subsided following Trump's announcement that he has no intention of firing Jerome Powell as Fed Chair.
- Investor sentiment was further bolstered by Trump's confirmation that he won't fire Powell, bringing an end to a week of apprehension and uncertainty.
- While traditional stocks enjoyed a surge on April 23, 2025, the cryptocurrency market also experienced a bullish day, with Bitcoin's price topping $94,000 and numerous altcoins following suit.
- As trade talks continue to unfold, both the stock market and cryptocurrencies will likely remain subject to the ebb and flow of any developments concerning the ongoing trade war.
- Amidst the surging stock market, the 10-year and 2-year Treasury yields both dipped, indicating a decrease in investor confidence and a possible shift in the broader economic outlook.
