Stocks went up for two days in a row because Trump said he wouldn’t fire Federal Reserve Chair Jerome Powell, and there’s hope he might lower tariffs on China. The Dow Jones Industrial Average rose about 500 points, or just over 1.3%, as of midday trading after initially gaining over 1,000 points earlier in the session. The S&P 500 was up nearly 2%, while the Nasdaq was up nearly 3%.
After Trump called for Powell’s “termination” last week, investors were nervous about a global trade war. But Trump said he had “no intention” to fire Powell, and now there’s optimism that the U.S. could ease tensions with China. “There is an opportunity for a big deal here,” said Treasury Secretary Scott Bessent at a meeting in Washington, D.C.
Despite the gains, investors are still anxious because Trump and Powell don’t get along, even though Trump picked Powell to lead the central bank. Trump wants the Fed to lower interest rates, which would be hard with his tariffs raising prices. Investors worry Trump will try to influence the central bank’s decisions.
Although Trump is in talks with many countries, his tariffs on China and other places are still in place. This has raised concerns about foreign investors losing confidence in the U.S. Bessent said that America should collaborate with other countries and expand U.S. leadership in institutions like the IMF and the World Bank.
Bessent wants the IMF and the World Bank to focus on promoting economic growth and fair trade, rather than getting involved in things like climate change. He also thinks the World Bank should support more energy projects in developing countries.
