Tariff optimism spurs rally on Wall Street
Wall Street’s major indexes surged to one-week highs on Wednesday, driven by optimism for a thaw in the U.S.-China trade war and President Donald Trump’s softened stance on Federal Reserve Chair Jerome Powell. Hopes of talks between Washington and Beijing, amid the tariff conflict, boosted market sentiment following a Wall Street Journal report quoting a senior White House official, who suggested U.S. tariffs on China could drop to around 50%-60%.
President Trump said on Tuesday of China, “We’re going to live together very happily and ideally work together,” and that tariffs on goods from China will “come down substantially, but it won’t be zero.” He also told reporters he would be “very nice” in negotiations with Beijing and that if China does not agree to a trade deal, “the U.S. will set the terms.”
Reuters:
Stocks extended gains after the report, building on early momentum after Trump said on Tuesday he had “no intention” of firing Powell, walking back on his comment that the Fed chair’s termination could not come “fast enough” that had drawn heavy criticism.
Markets welcomed the change in the president’s tone. Trump’s criticism of the Fed chair had fueled concerns about the central bank’s autonomy, leading to sharp losses in U.S. assets, including stocks and the dollar, earlier in the week.
Megacap tech stocks rose broadly, with Nvidia gaining 5.1%. Apple and Meta Platforms rose 3.6% and 6.7%, respectively… The S&P 500 posted one new 52-week high and two new lows, while the Nasdaq Composite recorded 25 new highs and 12 new lows.
MacDailyNews Take: Axing Jerome “Months Late” Powell, Mr. Transitory, before his end date on May 15, 2026 would be a good thing for Wall Street, but the economy and the stock market will survive 12 months of yet another feckless, often-wrong Fed Chair.
As we wrote in February 2023, “When certain quarters, including the Fed, delude themselves and others that ‘inflation is transitory’ and waste at least a year before doing a mere portion of what is necessary* (interest rate hikes), the price will be paid for being delusional and late.”
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
*Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
For new generations, sometimes tough lessons have to be retaught and learned the hard way. As we go through this, remember: It’s always darkest before the dawn. – MacDailyNews, July 14, 2022
After drifting around aimlessly for far too long on the U.S.S. Transitory, the delusional Fed is laughably too little, too late. Catching up will be difficult. – MacDailyNews, September 13, 2022
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill… [which] comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan
Please help support MacDailyNews — and enjoy subscriber-only articles, comments, chat, and more — by subscribing to our Substack: macdailynews.substack.com. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
The post Tariff optimism spurs rally on Wall Street appeared first on MacDailyNews.
