Markets rally as U.S. President signals policy calm and possible tariff reduction
Global equity markets surged on Wednesday following reassuring remarks from former U.S. President Donald Trump, who stated he had “no intention” of firing Federal Reserve Chairman Jerome Powell and signaled a possible reduction in aggressive tariffs on Chinese imports.
The comments eased investor concerns that had been heightened earlier in the week, after Trump criticized Powell for not lowering interest rates, calling him a “major loser” and “Mr. Too Late.” Fears of political interference in U.S. monetary policy had threatened market confidence, with analysts warning of a possible financial shock if the Fed’s independence was compromised.
However, Trump dialed back the rhetoric on Tuesday, saying, “I have no intention of firing him,” though he added he hoped Powell would be “more active” in lowering rates.
The former president also hinted at a softer approach to the ongoing trade war with China, admitting U.S. tariffs—currently as high as 145%—were “very high” and “will come down substantially.” He clarified, “They will not be anywhere near that number,” though he maintained they would not be reduced to zero.
Adding to the optimism, U.S. Treasury Secretary Scott Bessent revealed during a closed-door meeting that the administration was eyeing a de-escalation of the trade tensions with Beijing, describing the current path as “unsustainable.” White House Press Secretary Karoline Leavitt later confirmed that efforts toward a trade deal were underway.
Meanwhile, Chinese President Xi Jinping also spoke against tariff wars, while China’s foreign ministry signaled openness to renewed talks.
Markets Respond Positively
The easing rhetoric sent a wave of relief across global markets:
New York’s Dow Jones jumped 2.7%, closing at 39,186.98.
Hong Kong’s Hang Seng Index rose 2.4%, led by tech giants Alibaba and Tencent.
Tokyo’s Nikkei 225 closed up 1.9% at 34,868.63.
European markets also gained, with London’s FTSE 100 climbing 1.4%.
Taipei’s benchmark index soared over 4%, powered by a 7% jump in chipmaker TSMC, while Shanghai’s composite index edged down 0.1%.
Safe-haven assets like gold, which recently hit a record high of $3,500, pulled back to $3,300. Oil prices also climbed over 1%, recovering from recent losses linked to global economic uncertainty.
Despite the bullish sentiment, the International Monetary Fund (IMF) cut its global growth forecast by 0.5 percentage points to 2.8%, citing trade tensions as a key driver.
Forex & Commodities Snapshot (0810 GMT):
Euro/Dollar: $1.1385 (down)
Pound/Dollar: $1.3305 (down)
Dollar/Yen: 141.85 (up)
West Texas Intermediate: $64.63 (up 1.5%)
Brent Crude: $68.41 (up 1.4%)
In corporate news, Japan’s Sumitomo Rubber surged 3.7% after announcing a 25% price hike on tires for U.S. and Canadian vehicles, citing inflationary pressures.
