Stocks Gain as Trump Eases Stance on China and the Fed

US stocks rose on Wednesday as President Donald Trump backpedaled on his threat to remove Federal Reserve Chair Jerome Powell and indicated a potential deescalation of the trade war Trump started earlier this month.

The Morningstar US Market Index and the benchmark S&P 500 Index closed up 1.7%, while the more tech-heavy Nasdaq rose 2.5%.

All nine Morningstar Style Boxes rose, with the biggest gains coming from large-cap growth stocks, which jumped 2.7%. Mid-cap value stocks trailed, rising just 0.6%.

Nine of the 11 stock sectors closed up on Wednesday. Tech gained the most, with the Morningstar US Technology Index up 2.8%. The worst-performing sectors were energy and consumer defensive, with the Morningstar US Energy Index slipping 0.2% and the Morningstar US Consumer Defensive Index falling 0.3%.

Indications of a less-hawkish stance on tariffs include Treasury Secretary Scott Bessent saying in a speech that the status quo isn’t sustainable, as well as a Wall Street Journal report that cites a senior White House official saying tariffs on China could be cut to 50%-60%.

Tesla TSLA shares rose 5.3% on Wednesday by the early afternoon as CEO Elon Musk appeared to refocus away from government to running the electric vehicle company, despite an earnings report on Tuesday showing declines in sales and profits. The move was the stock’s largest single-day rise since its 22.7% spike on April 9.

In the bond market, longer-term US Treasury yields edged down, with the 10-year US Treasury yield slipping to 4.39% from 4.41% on Tuesday.

Gold prices retreated from record highs, with prices falling to just over $3,300 an ounce.