Calling Trump’s policy announcements “headline turbulence,” Tan Jing Yi of the Asia & Oceania Treasury Department at Mizuho Bank warned that global economies could be hurt in the long run, adding, “Sentiments swing from hopes of intense relief to inflicted economic gloom.” On Wall Street, the S&P 500 climbed 1.7 per cent and added to its big gain from Tuesday that more than made up for a steep loss on Monday. The Dow Jones Industrial Average rose 419 points, or 1.1 per cent, and the Nasdaq composite gained 2.5 per cent.
Much of the recent market volatility is because of uncertainty about what Trump will do with his economic policies. Adding to some relief was Trump saying late Tuesday that he has “no intention” to fire the head of the Federal Reserve.
Trump’s tough talk had 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. Trump also said US tariffs on imports coming from China could come down “substantially” from the current 145 per cent.
“It won’t be that high, not going to be that high,” he said.
Investors are hoping Trump would lower his tariffs after negotiating trade deals with other countries. Trump said this week that he would be “very nice” to the world’s second-largest economy and not play hardball with Chinese President Xi Jinping.
“There is an opportunity for a big deal here,” US Treasury Secretary Scott Bessent said Wednesday.
All the uncertainty means one of the few predictions many along Wall Street are willing to make is that sharp swings for financial markets will continue for a while. The market will “more likely than not continue to be dictated by Trump’s latest whims regarding tariffs and trade,” said Tim Waterer, chief market analyst at KCM Trade.
The S&P 500 remains 12.5 per cent below its record set earlier this year after briefly dropping roughly 20 per cent below the mark. Its swings have been coming not just day to day but also hour to hour as Trump and his administration’s officials continue to surprise markets.
Trump’s latest comments had a relaxing effect on the bond market, where Treasury yields eased. The yield on the 10-year Treasury fell to 4.38 per cent from 4.41 per cent late Tuesday. It dropped as low as 4.26 per cent earlier in the morning.
Big Tech helped lead indexes higher. Nvidia rose 3.9 per cent to claw back more of the sharp losses it took last week, when it said US restrictions on exports of its H20 chips to China could hurt its first-quarter results by USD 5.5 billion. The chip company’s stock was the strongest single force lifting the S&P 500.
Tesla revved 5.4 per cent higher after CEO Elon Musk said he’ll spend less time in Washington and more time running his electric vehicle company after Tesla on late Tuesday reported a big drop in profits. It’s been struggling because of backlash against Musk’s efforts to lead cost-cutting efforts by the US government.
All told, the S&P 500 rose 88.10 points to 5,375.86. The Dow Jones Industrial Average added 419.59 to 39,606.57, and the Nasdaq composite gained 407.63 to 16,708.05.
In energy trading, benchmark US crude rose 25 cents to USD 62.52 a barrel. Brent crude, the international standard, added 26 cents to USD 66.38 a barrel.
In currency trading, the US dollar slipped to 142.73 Japanese Yen from 143.15 Yen. The Euro cost USD 1.1350, up from USD 1.1322. (AP) NPK NPK
