Wall Street staged a powerful rebound on Tuesday, snapping a four-day losing streak as investors reacted to signals of potential de-escalation in the US-China trade dispute and reassurances from the White House on Federal Reserve leadership. The Dow Jones Industrial Average surged 1,016 points, or 2.66%, to close at 39,187. The S&P 500 jumped 2.51% to 5,288, while the Nasdaq Composite climbed 2.71% to 16,300.
Bessent raises hopes of trade détente
The primary catalyst for the rally was a private investor meeting earlier in the day where US Treasury Secretary Scott Bessent told attendees he expected a “de-escalation” in the US-China trade war in the “very near future.” Speaking at a JPMorgan-hosted summit in Washington, Bessent said the current tariff standoff—145% US duties on Chinese goods and 125% retaliatory tariffs from Beijing—was effectively a “trade embargo” and not sustainable.
“No one thinks the current status quo is sustainable,” Bessent said, adding that while a full agreement could take two to three years, the administration sees near-term easing as realistic.
Trump reinforces the shift—after the close
Following the market close, President Donald Trump appeared to align with Bessent’s tone, telling reporters that he expects the final tariff level on Chinese imports to end up “nowhere near” the current 145% rate. “We’re going to be very nice,” Trump said. “They’re going to be very nice, and we’ll see what happens.”
Trump also addressed concerns about Federal Reserve independence, clarifying that he has “no intention” of firing Fed Chair Jerome Powell before his term ends in May 2026.
Dow futures were up over 500 points on Tuesday evening, with S&P 500 and Nasdaq 100 futures also higher, suggesting a carryover effect into Wednesday’s open.
Safe-haven flows reverse slightly
Spot gold, which had touched a record US$3,500 earlier in the day, is currently trading 1.71% lower at US$3,322.91 an ounce.
WTI crude has risen 1.95% to US$64.31 a barrel on hopes that trade tensions might ease.
The US dollar also gained, with the Dollar Index up 0.7%.
One Australian dollar is buying 63.58 US cents.
Futures
The SPI futures are pointing to a 100 point rise.
