U.S. stock futures rise, as markets cheer indications that President Donald Trump is not moving to fire Federal Reserve Chair Jerome Powell. Comments from Trump about a possible reduction in his punishing tariffs on China bolstered sentiment as well. Meanwhile, Tesla (NASDAQ:TSLA) CEO Elon Musk suggests he may soon ratchet down his involvement in the Trump administration, as sales flag at the electric carmaker.
1. Futures climb
U.S. stock futures pointed higher, with investors showing some relief after Trump said he had no plans to oust Powell (more below).
By 03:38 ET (07:38 GMT), the Dow futures contract had added 467 points, or 1.2%, S&P 500 futures had increased by 86 points, or 1.6%, and Nasdaq 100 futures had advanced by 357 points, or 2.0%.
The main averages all climbed by more than 2.5% on Tuesday, underpinned by hopes that the White House’s recently adversarial approach to trade negotiations with China may be softening.
Trump told reporters that U.S. levies on the world’s second-largest economy would fall after a deal is secured, although he noted that duties would not decline all the way to zero. Treasury Secretary Scott Bessent also said that while discussions with Beijing would be a "slog", he believes the two countries can cool down escalating trade tensions. Analysts at ING said Bessent’s comments could help to bring "stabilization" to a sliding U.S. dollar.
Meanwhile, traders were turning their attention to a bevy of corporate earnings reports, including the first returns from the crucial "Magnificent Seven" group of mega-cap tech stocks.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Despite Tuesday’s gains, the benchmark S&P 500 ended trading almost 14% below its last record closing high on February 19, in a sign of the impact of weeks of turmoil sparked by Trump’s often erratic tariff policy.
2. Trump on Powell
Trump appeared to back off from scathing remarks about Powell on Tuesday, saying that he has "no intention" of firing the Fed leader.
Heading into the Easter weekend, markets had been fretting that Trump may be preparing to dismiss Powell for not moving fast enough to slash interest rates. Suggestions from a top White House adviser that officials were considering whether to sack Powell rattled already-jittery investors as well.
But Trump seemed to mollify these fears, adding that he would only like to Powell "be a little more active in terms of his idea to lower interest rates."
The de-escalation received swift approval from Wall Street, with several "Magnificent Seven" stocks -- including Amazon (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA), and Apple (NASDAQ:AAPL) -- rising in extended hours trading.
Still, indications of wariness remained over roller-coaster policy changes during the opening months of Trump’s second term in office. Elsewhere on Tuesday, the International Monetary Fund cut its growth forecasts for the United States, China and most countries, citing uncertainties around the impact of U.S. tariffs.
3. Musk to reduce commitment to DOGE, but not stepping down
Tesla CEO Elon Musk said he plans to reduce the time he devotes to the Trump administration from next month and spend more time concentrating on running his many companies.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Musk has become a close confidant of Trump, and has played a major role in an effort to downsize the federal government through the so-called Department of Government Efficiency, or DOGE.
But his political activities have caused a backlash that has begun to bleed into his myriad business interests, especially Tesla, which has faced widespread protests and vandalism at its showrooms. Slumping sales at the electric carmaker have also fueled investor calls for Musk to re-focus on managing the company.
Against this backdrop, Musk told analysts in a conference call that "[t]he large slog of work necessary to get the DOGE team in place and working with the government to get the financial house in order is mostly done."
Shares in Tesla, which reported first-quarter profits at its core auto business that were better than rock-bottom estimates, spiked in after-hours trading following the comments.
4. Earnings ahead
Earnings from a range of tech groups will be in the spotlight on Wednesday, as investors look to glean some insight into both the effect of Trump’s tariffs and the state of artificial intelligence investment.
Prior to the market open, fiber optic connector producer Amphenol (NYSE:APH), electrical component designer TE Connectivity (NYSE:TEL) and data center services provider Vertiv (NYSE:VRT) are due to report. After the bell, eyes will be on IBM (NYSE:IBM), software group ServiceNow (NYSE:NOW), and semiconductor firm Texas Instruments (NASDAQ:TXN).
Elsewhere, the Fed’s closely-watched "Beige Book" is set to be revealed. The document provides a snapshot of the economy in the weeks leading up to a Fed policy meeting.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. At its last gathering in March, the Fed left its benchmark interest rate unchanged at 4.25% to 4.50%, as the central bank assessed inflationary risks and signs that the U.S. economy remains in a relatively solid position despite the pressure exerted by the uncertainty around Trump’s tariffs.
5. Bitcoin soars
Bitcoin surged by more than 5%, hitting a seven-week high, as investors cheered Trump’s withdrawal of threats to dismiss Powell and his suggestion of potential tariff reductions on China.
Gold prices edged back from an all-time peak touched earlier this week as Trump’s comments bolstered a rebound in the dollar. A stronger greenback can make bullion more expensive for foreign buyers.
Meanwhile, oil prices rose, continuing the previous session’s positive tone after the U.S. imposed fresh sanctions on Iran amid ongoing nuclear talks. Both contracts settled nearly 2% higher on Tuesday.
