• US stock futures rose sharply Wednesday morning, building on Tuesday’s strong rally, boosted by Trump softening his stance on firing Fed Chair Powell and hinting at easing China tariffs.
• Treasury Secretary Bessent also fueled optimism, expecting trade “de-escalation” and calling the current situation “unsustainable”.
• Earnings Detail: Tesla missed Q1 revenue/profit significantly; Boeing seeks higher 737 MAX production rate; EU fined Apple & Meta over Digital Markets Act (DMA) rules.
• Global markets rallied Wednesday (Europe +1.5%, Asia led by HK/Japan) on reduced US-China trade fears & Powell relief following Trump remarks.
• 10-year Treasury yield dropped notably (to ~4.30%) after Trump backed off threat to fire Powell.
• Gold slipped from recent highs as immediate risk perception eased, but remains up >26% YTD. Oil dipped ~1% despite a large US inventory draw. Bitcoin hit a 7-week high on improved sentiment.
• Market sentiment saw a significant rebound driven by Trump’s change in tone regarding Powell and China trade, reducing policy uncertainty and boosting risk appetite.

U.S. stocks were set to rise for a second consecutive day on Wednesday, offering a measure of relief to investors after weeks of volatility and steep declines. Futures pointed higher across all three major indexes, building on Tuesday’s sharp rally that saw the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite each gain more than 2.5%. The rebound in sentiment followed remarks from President Donald Trump, who said he had “no intention” of removing Federal Reserve Chairman Jerome Powell — a departure from his recent criticism that had unsettled markets. Additional support came from Treasury Secretary Scott Bessent, who indicated that the administration expected a “de-escalation” in trade tensions with China “in the very near future.” Those comments, along with Trump’s suggestion that tariffs on Chinese imports may be scaled back, lifted risk appetite and drove premarket gains in stocks with significant China exposure.

Premarket leaders included Apple and Nvidia, which rose 3% and 6%, respectively, after being among the hardest hit in the recent sell-off. The “Magnificent Seven” tech names, which had dragged on the broader market in prior sessions, helped lead the rebound. The Dow jumped more than 1,000 points on Tuesday, snapping a four-day losing streak. The S&P 500 and Nasdaq both posted gains exceeding 2%, buoyed by softer rhetoric from Washington and renewed optimism around earnings season.

US Market Previous Day:

The S&P 500 jumped 2.51% to close at 5,287.76, while the Dow Jones Industrial Average surged 1,016.57 points, or 2.66%, to end at 39,186.98. The tech-heavy Nasdaq Composite gained 2.71%, closing at 16,300.42. The rally came as investors looked to recover from Monday’s sharp losses and responded to a more conciliatory tone from the administration.

(Source: TradingView.com)

Equities with significant exposure to China led the charge. The iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) both rose around 3%, benefiting from hopes of improved cross-border trade conditions. The broader tech sector also bounced back strongly, with stocks like Apple and Nvidia posting meaningful gains.

US Futures Remain in Green:

• Dow Jones Industrial Average futures remained higher with gains of 1.92%
• S&P 500 futures showed gains of 2.47%
• Nasdaq Composite futures lead the pack with gains of 2.98%.

Biggest Premarket Movers

• Boeing: Rose more than 5% after the company reported a narrower loss for the first quarter. Boeing stated its net loss was $31 million, an improvement from the $355 million loss in the same period last year. The adjusted loss of 49 cents per share was better than the $1.18 loss expected by analysts (FactSet). CEO Kelly Ortberg indicated plans to request FAA approval for increased 737 Max jet production.
• Tesla: Jumped more than 7% even though its first-quarter results missed Wall Street’s expectations. Tesla reported adjusted earnings of 27 cents per share on $19.34 billion in revenue, falling short of the 39 cents per share and $21.11 billion anticipated by LSEG analysts. During the earnings call, CEO Elon Musk mentioned his time commitment to the Department of Government Efficiency would decrease significantly starting in May.
• Enphase Energy: The solar technology company’s stock fell nearly 11% after missing Wall Street’s earnings and revenue expectations. CEO Badri Kothandaraman noted that tariffs on products sourced from China will negatively impact the company’s battery business, potentially reducing gross margin by about 2% in the second quarter.
• Cava: Shares of the fast-casual restaurant chain advanced nearly 6% following an upgrade to outperform from market perform at Bernstein. Analyst Danilo Gargiulo expressed confidence in the company’s ability to withstand an economic downturn and projected a potential share rally of over 40%.
• Eli Lilly: Shares of the pharmaceutical giant jumped 2% after Eli Lilly initiated lawsuits against four telehealth companies allegedly selling compounded versions of its popular weight loss drug Zepbound and diabetes treatment Mounjaro. Lilly accused these sites of deceiving consumers with “untested, unapproved drugs.”
• BP: Shares climbed about 2% after activist investor Elliott Management revealed in a regulatory filing that it has acquired a stake exceeding 5% in the oil major.
• SAP: The stock gained about 8% after the software company reported first-quarter earnings that beat analyst forecasts. SAP earned 1.44 euros per share ($1.64), surpassing the 1.32 euros per share expected by LSEG analysts, although revenue missed expectations.
• Bristol Myers Squibb: Shares of the biopharmaceutical giant slid almost 4% following the company’s announcement that its drug Cobenfy failed to demonstrate a statistically significant difference as a supplemental treatment for adults with schizophrenia in a Phase 3 trial.
• Capital One Financial: Shares of the credit card company rose about 3% after its first-quarter earnings surpassed expectations. Capital One reported $4.06 in adjusted earnings per share, compared to the $3.71 anticipated by LSEG analysts. Several Wall Street firms subsequently raised their price targets for the stock.
• Intuitive Surgical: Shares moved 7% higher after the surgical robot manufacturer reported first-quarter financial results that exceeded expectations. Adjusted earnings were $1.81 per share (vs. $1.72 LSEG estimate), and revenue reached $2.25 billion (vs. $2.19 billion LSEG estimate).
• Duolingo: Shares popped 4% after Morgan Stanley initiated coverage with an overweight rating. The firm assigned a Wall Street-high price target, calling Duolingo a “best-in-class consumer internet asset.”
• GE Vernova: The energy equipment manufacturer jumped more than 7% after affirming its 2025 financial guidance, despite anticipating a potential hit from tariffs of up to $400 million. GE Vernova continues to forecast revenue up to $37 billion and free cash flow up to $2.5 billion for the year.

Tariff Update:

In a notable shift from recent hardline rhetoric, President Donald Trump signaled a more conciliatory tone toward trade negotiations with China, acknowledging that the current 145% tariff on Chinese imports is “very high” and suggesting it would come down “substantially,” though not to zero. This marks a potential softening in the U.S. stance, coming as China also indicated its openness to renewed trade talks. However, China maintained that any dialogue would require a halt to U.S. threats. “We don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open,” said Foreign Ministry spokesperson Guo Jiakun, according to Dow Jones.

Treasury Secretary Scott Bessent echoed hopes for de-escalation during a closed-door investor summit hosted by JPMorgan Chase, noting that a breakthrough could be on the horizon. He acknowledged, however, that negotiations with China are likely to be “a slog,” with both sides recognizing the unsustainability of the current impasse.

Key Economic Data/News:

President Trump clarified on Tuesday that he has “no intention” of firing Federal Reserve Chair Jerome Powell, walking back recent criticism in which he referred to Powell as a “major loser” and suggested his removal “cannot come fast enough.” While reiterating his desire for more aggressive rate cuts, Trump struck a notably more tempered tone, stating he would like Powell “to be a little more active” in lowering interest rates.

Looking ahead, investors will be focused on upcoming economic data releases, including updates on mortgage rates, the S&P Global PMI Flash, and home sales figures. These indicators are expected to offer further insight into the health and direction of the U.S. economy.

Earnings Season/Company News:

Tesla reported disappointing first-quarter results on Tuesday, missing analysts’ expectations on both revenue and earnings. Total revenue fell 9% year-over-year to $19.34 billion, below the consensus estimate of $21.11 billion. Net income dropped sharply, down 71% to $409 million, or 12 cents per share, compared to $1.39 billion, or 41 cents per share, a year earlier. Automotive revenue also declined 20% over the same period. Tesla’s CFO, Vaibhav Tanej, noted during the earnings call that the company plans to enter the Indian market.

Despite the underwhelming financial performance, Tesla shares rose over 5% in extended trading. The rally may have been supported by CEO Elon Musk’s comment that his involvement with Trump’s Department of Government Efficiency will reduce “significantly” starting in May. Still, Tesla shares remain down more than 40% year-to-date, weighed by growing competition from Chinese automakers, public backlash tied to Musk’s political affiliations, and concerns over how Trump’s tariffs could impact Tesla’s global supply chain. In its shareholder letter, Tesla acknowledged rising uncertainty in both the automotive and energy sectors, driven by rapidly evolving trade policies and shifting political sentiment.

Boeing, meanwhile, is looking to ramp up production of its 737 Max jets. The company plans to seek Federal Aviation Administration approval to increase output to 42 aircraft per month, up from the current cap of 38. This limit was imposed following a January 2024 incident involving a door plug detachment mid-flight. Boeing CEO Kelly Ortberg said the company is showing signs of recovery, with narrowed losses and improved aircraft deliveries in the first quarter. However, the reported results reflect trade conditions only through March 31, before President Trump intensified global tariff measures that could raise costs for imported parts and materials.

In regulatory news, the European Union fined Apple €500 million ($571 million) and Meta €200 million ($228 million) for violations of the Digital Markets Act (DMA). The European Commission stated that Apple had breached the DMA’s “anti-steering” rules by restricting developers from informing users about alternative offers outside the App Store. Apple has been instructed to remove those restrictions and ensure compliance going forward.

Global Market Trends:

Global equities rose on Wednesday, buoyed by easing fears of a prolonged U.S.-China trade war. In Europe, the Stoxx 600 index gained 1.5%, with most sectors in positive territory. Investor sentiment improved following President Trump’s remarks suggesting that U.S. tariffs on Chinese imports—currently set at 145%—“won’t be anywhere near that high” going forward, although they would not be eliminated entirely.

Asia-Pacific markets mirrored the optimism. Hong Kong led the gains, with the Hang Seng Index rising 2.37% and the Hang Seng Tech Index up 3.07%. Japan’s Nikkei 225 climbed 1.89%, and the broader Topix index rose 2.06%. South Korea’s Kospi advanced 1.57%, while the Kosdaq added 1.39%. Australia’s S&P/ASX 200 closed 1.33% higher. Mainland China’s CSI 300 ended flat, reflecting a more cautious tone among domestic investors. Markets also responded positively to Trump’s assurance that he has no plans to replace Federal Reserve Chair Jerome Powell.

Debt Market:

(Source: TradingView.com)

Following U.S. President Donald Trump’s retraction of comments about potentially firing Federal Reserve Chairman Jerome Powell, the yield on the 10-year Treasury note declined on Wednesday. It fell 9 basis points to 4.298%. Meanwhile, the 2-year Treasury yield increased by 1.5 basis points to 3.803%.

Commodities and Other Assets:

Gold prices slipped on Wednesday as investors reacted to U.S. President Donald Trump’s softer stance on tariffs and his reversal on recent threats to fire Federal Reserve Chair Jerome Powell. Despite the dip, gold remains one of the year’s top-performing assets, having surged over 26% since the beginning of 2025. It has repeatedly broken record highs amid ongoing geopolitical uncertainty. JPMorgan expects gold to continue its upward trajectory, projecting it to surpass $4,000 an ounce in 2026. Silver faced headwinds, with JPMorgan noting near-term pressure due to uncertain industrial demand. However, the bank expects the metal to rebound in the second half of the year, forecasting prices to reach $39 an ounce by the end of 2025.

Oil prices declined roughly 1% on Wednesday, reversing earlier gains linked to tightening U.S. supply and renewed sanctions on Iran. The pullback followed comments from Kazakhstan’s new Energy Minister, who said the country would prioritize its own production strategy over OPEC+ targets. The statement raised concerns about unity within the producer group. Despite the headline drag, U.S. sanctions on a key Iranian shipping figure provided some price support. Further support came from a sharp drop in U.S. inventories: crude stocks fell by 4.6 million barrels, gasoline by 2.2 million, and distillates by 1.6 million, according to American Petroleum Institute data.

(Source: TradingView.com)

Bitcoin rallied to a seven-week high, lifted by improving investor sentiment following Trump’s de-escalation of his rhetoric on Powell and trade policy. After weeks of range-bound trading driven by monetary policy uncertainty, the cryptocurrency responded positively to the apparent cooling of political tensions.

Market Sentiment:

Investor sentiment rebounded on Wednesday after President Trump stepped back from threats to fire Federal Reserve Chair Jerome Powell and signaled a softer approach to trade with China. The shift in tone was welcomed by markets, which had been rattled by rising concerns over central bank independence and global trade friction.

Trump’s clarification that he has “no intention” of dismissing Powell reassured investors, reinforcing expectations of policy continuity at the Federal Reserve. Markets interpreted the comments as a signal that political interference in monetary policy may be limited in the near term.

The result was a modest but broad-based uptick across risk assets. Wednesday’s rally underscored how sensitive markets remain to political developments, particularly in the current environment of cautious investor positioning. After weeks of volatility, even slight improvements in the geopolitical and policy narrative were enough to prompt renewed risk appetite.