By Stephen Culp
(Reuters) – U.S. stocks rebounded on Tuesday as a spate of quarterly earnings reports and hints at the de-escalation of U.S.-China trade tensions brought buyers in from the sidelines.
U.S. stocks jumped further in extended trade after President Donald Trump said he has no plans to fire Federal Reserve Chair Jerome Powell, stepping back from his recent rhetoric against the central bank chief.
Trump also told reporters he would be very nice in negotiations with China, and that tariffs on imports from the country would fall significantly following a deal, but not to zero.
In a sign that traders expect Wall Street to rally on Wednesday, S&P 500 futures jumped almost 2% following Trump’s comments, while Amazon.com and Nvidia were last up 3% each and Apple climbed 2% in after-hours trading.
During Tuesday’s session, a broad rally boosted all three major U.S. indexes by more than 2.5%, as investors looked past Trump’s attacks against Powell, who is widely considered a stabilizing force for the markets.
After being battered for weeks by the White House’s erratic and multi-front tariff disputes, the S&P 500 at Tuesday’s close was nearly 14% below its record closing high reached on February 19.
Earlier on Tuesday Treasury Secretary Scott Bessent said that while trade negotiations with Beijing will likely be “a slog,” he believes there will be a de-escalation of U.S.-China trade tensions.
“The roller coaster continues,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “Some thawing of the aggression (between) U.S. and China, thanks to Bessent’s comments, helped push things higher.”
“Washington understands that the uncertainty around tariffs is hurting markets and maybe we can get some type of positive news going forward on the trade front,” Detrick added.
Those uncertainties helped prompt the International Monetary Fund to slash its forecasts for U.S. economic growth to 1.8% in 2025, citing the impact of U.S. tariffs, now at 100-year highs.
Meanwhile, the first-quarter earnings season gathered steam.
So far, 82 of the companies in the S&P 500 have reported. Of those, 73% have beaten expectations, according to LSEG.
Analysts now see aggregate S&P 500 earnings growth at 8.1% for the January – March period, down from the 12.2% growth forecast at the beginning of the quarter, per LSEG.
“Current earnings are showing a continuation of good fundamentals, which is not a surprise,” said Bill Merz, head of Capital Market Research at U.S. Bank Wealth Management, Minneapolis, who added investors are parsing corporate guidance for “clarity on what companies are planning to do in response to tariff policy.”