US stocks closed higher on Wednesday, lifted by signs of easing US-China trade tensions and political reassurances from President Donald Trump. The Dow Jones Industrial Average rose 419 points, or 1.07%, to end at 39,606.57. The S&P 500 gained 1.67%, finishing at 5,375.86, while the Nasdaq Composite surged 2.50% to 16,708.05. All three major indexes posted back-to-back gains.
Despite the positive finish, the session ended well off intraday highs. Earlier in the day, the Dow had jumped more than 1,100 points, and the S&P 500 was up over 3%, as markets briefly surged on renewed trade optimism.
Trade rhetoric cools
Markets reacted positively to Trump’s latest remarks on Chinese tariffs. Speaking Tuesday, he indicated that the current 145% tariff rate would likely come down “substantially”, although it would not be eliminated entirely. His comments were seen as a shift toward a less confrontational approach to trade talks with Beijing.
Echoing that sentiment, Treasury Secretary Scott Bessent added Wednesday that both nations had a chance to strike “a big deal” on trade. The Wall Street Journal reported that the White House is weighing a reduction in China tariffs to a range of 50% to 65%, though a White House official later clarified that any move would have to be mutual.
China-exposed stocks rebound
Shares in companies with strong China ties rallied. Apple rose over 2%, while Nvidia gained more than 3%. Tesla jumped 5%, aided by both easing tariff concerns and CEO Elon Musk’s statement that he’ll soon scale back his role in Trump’s Department of Government Efficiency.
Powell stays put — for now
Investors also welcomed Trump’s assurance that he does not intend to remove Fed Chair Jerome Powell. The president had previously criticised Powell and hinted at termination, but his latest comments eased fears over political interference at the Federal Reserve.
Commodities and the dollar
WTI crude is trading flat at US$62.27 a barrel.
Spot gold is trading 0.65% higher at US$3,309.60 an ounce.
One Australian dollar is buying 63.65 US cents.
Futures
The SPI futures are pointing to a 13 point rise.
