Stocks gain on hopes Trump will ease tensions with the Fed — and China

Stocks gained for a second consecutive session on Wednesday after President Trump said he wouldn’t fire Federal Reserve Chair Jerome Powell and on hopes he could ease some of the tariffs imposed on China.

The Dow Jones Industrial Average rose about 500 points, or just over 1.3%, as of midday trading after initially gaining over 1,000 points earlier in the session. Meanwhile the S&P 500 was up nearly 2%, while the Nasdaq was up nearly 3%.

The back-to-back gains come after a rocky stretch in markets after Trump last week called for Powell’s “termination” at a time when investors were already nervous about a global trade war.

But Trump eased some of the nerves on Tuesday after he said he had “no intention” to fire Powell, whose term ends next year. At the same time, there’s rising optimism that the U.S. could de-escalate some of the tensions with China.

“There is an opportunity for a big deal here,” Treasury Secretary Scott Bessent said on the sidelines of the International Monetary Fund and World Bank spring meeting taking place in Washington, D.C.

Bessent urged China to stop relying on exports and increase consumption, saying it would help ease trade tensions. China has long been accused of pumping up exports as a way to boost its economy, while making it more difficult for other countries to export there.

“If they want to rebalance, let’s do it together,” Bessent added.

Treasury Secretary Scott Bessent delivers remarks during the IMF and World Bank meetings taking place in Washington, D.C., on April 23, 2025.
Treasury Secretary Scott Bessent delivers remarks during the IMF and World Bank meetings taking place in Washington, D.C., on April 23, 2025. (Andrew Harnik/Getty Images | Getty Images North America)

Markets will likely remain tense, however

Despite the gains, investors are likely to remain anxious.

The president and the Fed chair have long had a tense relationship — even though it was Trump who selected Powell to head the central bank during his first term. Last week, the president also called on the Fed to lower interest rates — even though his own sweeping tariffs would make that more difficult by raising prices of many imports.

Although Trump said he won’t fire Powell, investors fear the president will try to meddle with the central bank’s independence by weighing in on monetary policy.

Meanwhile, though the Trump administration has said it is negotiating with many countries, many of the president’s tariffs remain in place, including additional 145% levies on China.

Trump’s sweeping tariffs on goods from China and many other countries have raised concern that foreign investors are losing confidence in the U.S. — while also threatening to impose a new global economic order.

Bessent’s message to global officials

On Wednesday, Bessent said that the U.S. wants to remain engaged in world affairs.

“I wish to be clear. America first does not mean America alone,” Bessent said. “To the contrary, it is a call for deeper collaboration and mutual respect among trade partners. Far from stepping back, America first seeks to expand U.S. leadership in international institutions like the IMF and the World Bank.”

Still, Bessent called on the IMF and the World Bank — set up in the wake of World War II — to focus on their core missions of promoting economic growth and balanced trade, and not allow what he called “mission creep” into areas such as climate change.

As part of that, Bessent said the World Bank should help to bankroll more nuclear and fossil fuel energy projects in the developing world.

“The history of humanity teaches a simple lesson,” Bessent said. “Energy abundance sparks economic abundance. That’s why the [World] Bank should encourage an all-of-the above approach to energy development.”

 

Alabama executes Gregory Hunt by nitrogen gas for 1988 murder of Karen Lane

Hunt's execution marks Alabama's third this year, on pace to match the six it carried out last year, and the fifth time it used the controversial method.

National Park signage encourages the public to help erase negative stories at its sites

The Department of the Interior is requiring the National Park Service to post signage nationwide by June 13, asking visitors for feedback on any information they feel misrepresents American history.

Looking into Alabama’s ‘Blood Money’: how taxpayers foot the bill for lawsuits by prisoners

The Alabama Department of Corrections settled more than 100 lawsuits against its corrections officers for excessive use of force since 2020. Inmates say officers left them with broken bones and brain damage. Beth Shelburne, a Birmingham-based independent investigative reporter, found that taxpayers are covering the cost in her four-part series for the Alabama Reflector called "Blood Money."

TikTok superstar Khaby Lame was detained by ICE before being allowed to leave the U.S.

Lame, 25, produces nearly silent videos that have made him the most-followed personality on TikTok. But U.S. officials say Lame, an Italian citizen, overstayed his visa earlier this month.

After ICE raids in LA, families of those detained are desperate for answers

Families of people who were detained by ICE in immigration raids say they haven't been able to make contact with their loved ones or even find out where many of them are being held.

Bolsonaro takes the stand in historic Brazil coup trial

Brazil's former President Jair Bolsonaro took the stand Tuesday, accused of plotting a coup to cling to power after losing the 2022 election. It's the first time a former Brazilian leader is being tried for attempting to overthrow the government.

More Economy Coverage