U.S. stocks closed sharply higher on Wednesday as hopes for eased U.S.–China trade tensions and clarity on Fed leadership buoyed sentiment. The Dow Jones Industrial Average rose 419.59 points (1.07%) to settle at 39,606.57 . The S&P 500 climbed 88.10 points (1.67%) to 5,375.86 , while the Nasdaq Composite jumped 407.63 points (2.50%) to 16,708.05 . Despite these gains, all three indexes pared back from intraday peaks—each was up over 3% at one point—before fading into the close .
Stocks rallied after President Trump signaled he will roll back the current 145% tariff on Chinese imports—calling it “very high” and promising substantial cuts, though not zero . Treasury Secretary Scott Bessent called the existing tariff regime “unsustainable,” urging a bilateral de-escalation with China . Reports also indicate the administration is considering trimming tariffs to the 50–60% range, provided China reciprocates .
Investors exhaled as Trump reversed course on Fed Chair Jerome Powell, stating he has “no intention” of removing Powell despite earlier criticism . In tandem, the 10-year Treasury yield steadied as anxiety over political interference in monetary policy eased .
Broad market breadth led gains, with technology and consumer discretionary sectors outperforming, while staples and energy lagged . Apple and Nvidia jumped over 2% on trade-war relief , and Tesla soared 5.4% after CEO Elon Musk said he’ll cut back federal advisory duties to refocus on company operations .
Prompts
👉 Which sector are you most bullish on as trade tensions cool?
👉 Did you adjust your portfolio after Trump’s Powell comment? Share your strategy!
Educational Insights
Intraday Peak vs. Closing Price: The intraday peak reflects a stock’s highest price during trading, while the closing price determines its official performance for the day. A large gap between peak and close can signal profit-taking.
Tariff Impact on Equities: High tariffs raise input costs for companies, compress margins, and heighten uncertainty. Announcements of tariff reductions often trigger rallies as investors price in lower trade friction.
Market Analysis
With trade-war fears abating and the Fed’s independence affirmed, the near-term outlook remains constructive. Key levels to watch include the S&P 500’s 5,350 breakout zone as new support and resistance near 5,450. On the Dow, breaching 40,000 could pave the way for fresh highs, while bond yields will continue to offer clues on rate-cut expectations.
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