Markets Rebound as Trump Calms Fed, Tariff Tensions

Global stock markets saw a sharp recovery on Wednesday after U.S. President Donald Trump dismissed speculation about removing Federal Reserve Chairman Jerome Powell and hinted at a possible rollback of steep tariffs on Chinese imports.

Earlier in the week, financial markets were rattled by reports that Trump might oust Powell for refusing to cut interest rates, branding him “Mr. Too Late” and a “major loser.” Such a move, analysts warned, could have undermined the independence of the U.S. central bank and triggered another global financial crisis.

But Trump struck a more measured tone on Tuesday, telling reporters, “I have no intention of firing him.” He added that while he believes it’s the right time to reduce interest rates, Powell’s reluctance to act wouldn’t be a deal-breaker.

Markets welcomed the president’s softer stance, and investor confidence was further bolstered by his remarks on U.S.-China trade. Trump admitted that current American tariffs on Chinese goods—some as high as 145%—were “very high,” adding that they would be “coming down substantially.” However, he made it clear they would not be completely eliminated.

The comments came shortly after U.S. Treasury Secretary Scott Bessent told a private gathering in Washington that tensions between the two economic giants were likely to ease soon, calling the current situation unsustainable.

White House Press Secretary Karoline Leavitt echoed the optimism, saying, “The president and his team are working toward a resolution. Progress is being made.”

Meanwhile, Chinese President Xi Jinping warned that protectionist trade policies were disrupting global commerce and threatening the international economic order. Still, China’s foreign ministry later signaled openness to negotiations, stating that “the door remains wide open” for talks.

Markets across Asia and Europe responded positively. Hong Kong led the gains with a tech-fueled rally, while Tokyo, Seoul, Sydney, and Mumbai also climbed. European markets in London, Paris, and Frankfurt followed suit.

Taiwan’s TSMC soared 7%, lifting the broader Taipei index by over 4%. Gold, which had recently soared past $3,500 amid economic uncertainty, pulled back to around $3,300. The dollar also regained some strength against major currencies. Oil prices rose by over 1%, rebounding from recent losses due to trade-related fears.

Wall Street’s three major indexes closed more than 2% higher on Tuesday, signaling a strong reversal in sentiment.

Chris Weston of Pepperstone noted, “Investor mood is clearly improving. The earlier panic around Powell seems to be fading, and markets are regaining some optimism.”

Even the IMF’s downgrade of the global growth forecast—from 3.3% to 2.8% for the year—failed to curb the market’s rally, with investors focused more on the signals of de-escalation between Washington and Beijing.

Japanese tyre manufacturer Sumitomo Rubber also saw a bump in share value, rising 3.7% after announcing a price hike of up to 25% for tyres sold in the U.S. and Canada.

Selected Market Highlights (as of 0810 GMT):

• Nikkei 225 (Tokyo): +1.9% at 34,868.63
• Hang Seng (Hong Kong): +2.4% at 22,072.62
• Shanghai Composite: -0.1% at 3,296.36
• FTSE 100 (London): +1.4% at 8,445.62
• Dow Jones (New York): +2.7% at 39,186.98
• WTI Crude: +1.5% at $64.63/barrel
• Brent Crude: +1.4% at $68.41/barrel
• Gold: $3,300
• Euro/USD: $1.1385
• GBP/USD: $1.3305
• USD/JPY: 141.85