Stocks poised to pad gains after Trump administration eases investor fears

Stock futures saw a significant boost following President Trump’s statement on Tuesday that he has no intention of removing Federal Reserve Chair Jerome Powell and his willingness to ease trade tensions with China. This positive news resulted in Dow Jones Industrial Average futures surging by 765 points, or 2%, indicating a strong opening for the markets. S&P 500 futures also rose by 135 points, or 2.5%, while Nasdaq Composite futures saw a 3.1% increase.

According to John Canavan, lead U.S. stock analyst for Oxford Economics, the improved demand for U.S. assets was a direct result of the White House’s toned-down rhetoric. Following a rough market downturn on Monday, a series of updates from the Trump administration helped restore investor confidence.

President Trump announced that tariffs on China would see a substantial reduction, and Treasury Secretary Scott Bessent expressed his belief that the trade war with China is unsustainable and anticipates a de-escalation. Additionally, Trump, who previously criticized Powell, stated that he has no plans to fire him.

The Federal Reserve Board is maintaining its stance on interest rate cuts for now, with the next meeting scheduled for May. Despite a lackluster earnings call, Tesla shares experienced a 7% increase before the market opened on Wednesday. Elon Musk, CEO of Tesla, mentioned that his involvement with the Department of Government Efficiency (DOGE) would decrease significantly starting in May.

Tech giants like Nvidia also saw gains before the market opened on Wednesday, with the company’s shares rising by 5.5%. The positive outlook on trade led to a surge in market indices on Tuesday, with analysts from Piper Sandler noting that the Dow climbed over 1,000 points.

In conclusion, the market is experiencing a positive trend following the recent developments in trade negotiations and the Federal Reserve’s stance on interest rates. Investors are hopeful for a resolution to the ongoing trade disputes and are closely monitoring the market for further updates.

This article was contributed by The Associated Press and rewritten for WordPress by Mary Cunningham, a reporter for CBS MoneyWatch with a background in business and finance journalism.