Global stock markets rallied Wednesday after US President Donald Trump moved to reassure investors by confirming he has “no intention” of firing Federal Reserve Chair Jerome Powell, while also indicating a possible reduction in tariffs on Chinese goods.
Markets, already shaken by an ongoing trade war, had been further rattled earlier in the week when Trump lashed out at Powell, calling him a “major loser” and “Mr. Too Late” for not cutting interest rates. Reports that Trump was considering removing the Fed chief raised fears over the central bank’s independence and the broader economic outlook, according to news agency AFP.
However, the president sought to calm nerves Tuesday, telling reporters, “I have no intention of firing him.” The statement helped steady sentiment, with analysts suggesting the worst of recent market turbulence may be behind us.
“These comments have given markets a sense of optimism that recent chaos might have peaked and we’re heading towards calmer waters,” said Russ Mould, investment director at AJ Bell.
Global markets rebound
European stocks responded strongly: Frankfurt’s DAX jumped 2.5%, Paris’ CAC 40 rose 2.1%, and London’s FTSE 100 gained 1.3%.
In Asia, Hong Kong’s Hang Seng Index soared 2.4% on a tech rally led by Alibaba and Tencent, while Tokyo’s Nikkei 225 climbed 1.9%. Taiwan’s TSMC led Taipei’s index 4% higher after posting a 7% surge. Shanghai, however, dipped slightly, down 0.1%.
Wall Street also enjoyed strong gains overnight, with all three major US indices rising more than 2%.
Trade war thaw?
Trump’s remarks extended to trade, hinting at a possible shift in stance. The US currently imposes tariffs of up to 145% on various Chinese imports, with Beijing responding with 125% duties. But Trump acknowledged that US tariffs were at a “very high” level, adding, “That will come down substantially.”
Treasury Secretary Scott Bessent reportedly echoed that sentiment in a closed-door Washington event, expressing optimism that a de-escalation in the tariff dispute is imminent.
Economic indicators mixed
In the eurozone, April’s business activity held steady despite slowing confidence and the strain of US tariffs. The UK, however, saw a sharper downturn, with its Purchasing Managers’ Index dropping to a two-and-a-half-year low.
Commodities and currency moves
Gold, which had surged past $3,500 per ounce on Tuesday amid safety concerns, slipped to around $3,300. Oil prices gained more than 1% on improved sentiment, while the dollar recovered slightly against major currencies.
Corporate highlights
SAP shares jumped over 10% in Frankfurt after the German software giant met Q1 earnings expectations.
Sumitomo Rubber gained 3.7% in Tokyo after announcing a 25% price hike on tires sold in North America.
Key indices at 1040 GMT:
- London – FTSE 100: +1.3% at 8,434.11
- Paris – CAC 40: +2.1% at 7,480.69
- Frankfurt – DAX: +2.5% at 21,832.53
- Tokyo – Nikkei 225: +1.9% at 34,868.63 (close)
- Hong Kong – Hang Seng: +2.4% at 22,072.62 (close)
- Shanghai – Composite: -0.1% at 3,296.36 (close)
- New York – Dow Jones: +2.7% at 39,186.98 (close)
Currency and commodities:
- Euro/Dollar: $1.1404
- Pound/Dollar: $1.3305
- Dollar/Yen: ¥141.86
- Brent Crude: $68.27 (+1.2%)
- WTI Crude: $64.51 (+1.3%)
- Gold: $3,300/oz
