Background on Donald Trump and Jerome Powell
Donald Trump, the President of the United States, has expressed that he does not intend to fire Jerome Powell, the President of the Federal Reserve. This statement has contributed to a positive sentiment on Wall Street, as investors worldwide breathe a sigh of relief. Trump’s potential negotiation for better trade tariffs with China has also boosted market optimism.
Market Performance
On this Wednesday’s trading session, major Wall Street indices advanced, supported by the relieved mood among global investors following Trump’s comments.
- The Nasdaq Composite led the gains with a 2.50% increase, closing at 16,708.05 points.
- The S&P 500 followed closely, rising 1.67% to finish at 5,375.82 points.
- The Dow Jones Industrial Average also participated in the upward trend, climbing 1.07% to reach 39,606.57 points.
Analysts’ Perspectives and Market Volatility
Felipe Mendoza, an analyst at Mercados Financieros ATFX LATAM, stated that easing trade tensions between the US and China could be the catalyst markets need to regain momentum in the second half of 2025, especially if accompanied by a more flexible monetary policy towards the end of the year.
However, Mendoza also noted that short-term market volatility is likely to persist. Nonetheless, if trade tensions ease and the Fed prepares for a pause or rate cut in the second half of the year, markets could maintain an upward bias.
Analysts from Banamex highlighted in a statement that the market improvement was due to recent remarks by Treasury Secretary Scott Bessent, emphasizing that the current trade tariff situation between the US and China remains unsustainable. Consequently, he expects new negotiations and a decrease in trade tensions.
Trump’s Stance on Trade Tariffs and the Federal Reserve
According to Banamex analysts, Trump’s declaration that he does not intend to fire Jerome Powell and his less aggressive stance on trade tariffs with China, which could potentially be reduced from the current 145%, have contributed to market optimism.
Tesla’s Impact on the Market
Tesla stocks surged in the Nasdaq after CEO Elon Musk announced his intention to reduce government work commitments and focus more on managing his businesses. The stock price increased by 5.37% to $250.55 per share.
Despite this positive performance, Tesla reported a 71% decrease in net profits for the first quarter of this year.
Boeing’s Performance
Boeing reported a smaller-than-expected quarterly loss as the company produced and delivered more aircraft, driving its stock price up by 6.02% to $172.31 per share.
