Stocks Rally After Trump Softens Talk on Fed, Tariffs

US stocks rose Wednesday as a worldwide rally came back around to Wall Street.

• The S&P 500 rose 88.10 points, or 1.7%, to 5,375.86 after President Trump appeared to back off his criticism of the Federal Reserve and his tough talk in his trade war.
• The Dow Jones Industrial Average rose 419.59 points, or 1.1%, to 39,606.57.
• The Nasdaq composite rose 407.63 points, or 2.5%, to 16,708.05 .

Treasury yields also eased in the US bond market after Trump said he has no intention to fire the Fed's chair and that his tariffs in imports from China could come down, the AP reports. Stocks also rallied across much of Europe and Asia.

Big Tech helped lead stock indexes higher. Nvidia rose 3.9% to claw back more of the sharp losses it took last week. The chip company's stock was the single strongest single force lifting the S&P 500. Vertiv Holdings, which traces its roots to the industry's first manufacturer of computer room air conditioning, jumped 8.6% after reporting stronger profit and revenue for the latest quarter than analysts expected. It said it's continuing to see accelerated demand from AI data centers. Super Micro Computer, a company that makes servers used in AI, leaped 7.6%. Tesla, which reported a big drop in profits Tuesday, revved 5.4% higher after CEO Elon Musk said he'll spend less time in Washington and more time running his electric vehicle company.

Trump said late Tuesday that he has "no intention" of firing the head of the Federal Reserve. Trump had been angry with Jerome Powell, calling him "a major loser," because of the Fed's hesitance to cut interest rates. Trump's tough talk frightened investors because the Fed is supposed to act independently, without pressure from politicians, so that it can make decisions that may be painful in the short term but are best for the long term. While a cut to interest rates by the Fed could give the economy a boost, it could also put upward pressure on inflation. Economists say Trump's tariffs are likely both to slow the economy and to raise inflation, at least briefly

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Trump may have recognized the market's fear about a move against Powell. He may also be looking to keep someone around to blame later if the economy does fall into a recession, according to Thierry Wizman, a strategist at Macquarie. "Indeed, if the Fed cuts its policy interest rates aggressively, Trump would have little excuse for a recession apart from the pugnacity of his tariff policies," Wizman says.

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