By Stephen Culp
NEW YORK (Reuters) -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.” First-quarter earnings season has hit full stride, with 110 of the companies in the S&P 500 having reported. Of those, 75% have beaten Wall Street estimates, according to LSEG. Analysts now see aggregate S&P 500 earnings growth of 8.4% for the Jan to March period, up from an even 8.0% as of April 1, per LSEG.
Tesla shares rose 5.3% after Chief Executive Officer Elon Musk said he would significantly scale back his work with the Trump Administration to devote more time to running his companies. Even so, the electric carmaker posted a 71% plunge in quarterly net profit.
Boeing reported a smaller-than-expected quarterly loss as the planemaker produced and delivered more aircraft. Its shares surged 6.1%.General Dynamics posted a 27% increase in first-quarter profit on sustained defense demand, but the company’s business jet orders fell from the previous quarter. Its stock dropped 3.3%.