Wall Street stocks advanced on Wednesday on revived hopes for progress in the U.S.-China trade dispute and as President Donald Trump soothed fears the Federal Reserve could lose its autonomy with reassurances that he has "no intention of firing" Fed Chair Jerome Powell. All three major U.S. stock indexes pared gains by the closing bell. They gathered momentum during the session after Treasury Secretary Scott Bessent said high tariffs between the U.S. and China were unsustainable and Trump signaled he was open to easing trade tensions between the world's two largest economies.
"We had such a strong open, it was really related to developments out of Washington," said Russell Price, chief economist at Ameriprise in Troy, Michigan. "That being the idea that President Trump said he has no intention of firing Jerome Powell, and that we could see a substantial decline in the tariff rates" currently levied against China. "So those are clearly both positives that the market was hoping to get, and they got them," Price added. Late on Tuesday, Trump dialed back his attacks on the Fed, which included threats to fire Powell. Most investors view the central bank chief as a stabilizing force in the market, which has been rattled by Trump's chaotic trade policy. "Fed independence is one of the unspoken bastions of the developed market system," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "So to threaten that obviously had put pressure on bonds and the dollar and kind of accelerated that rotation out of American assets."
Source: Reuters
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