Dow gains 500 points but is far off session highs as rally fades: Live updates

Stocks surged on Wednesday on hopes that U.S.-China trade tensions could soon ease, while President Donald Trump signaled he doesn’t plan to remove Federal Reserve Chairman Jerome Powell from his post as central bank leader.

The Dow Jones Industrial Average popped 538 points, or 1.4%. The S&P 500 climbed 2%, and the Nasdaq Composite rallied 3%.

However, the major averages faded from their session highs. Early Wednesday morning, the blue-chip Dow had added as much 1,100 points.

Trump said Tuesday he’s willing to take a less confrontational approach to trade talks with China, noting that the current 145% tariff on Chinese imports is “very high, and it won’t be that high. … No, it won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”

Treasury Secretary Scott Bessent also said Wednesday that both countries have the chance to make “a big deal” on trade. “If they want to rebalance, let’s do it together,” Bessent said.

“That’s what the market has been begging for — even just a hint of cooling down in the back and forth between the U.S. and China when it comes to trade,” said Keith Buchanan, portfolio manager at Globalt Investments. “The market is relieved, of course — the worst talk is hopefully behind us — but we’re still not at the end game.”

The Wall Street Journal also reported Wednesday, citing a White House official, that the administration was considering reducing China tariffs to between 50% and 65%. A White House official later told CNBC that such a move would have to be bilateral, however, with China lowering trade barriers as well.

Stocks with higher exposure to China that have sold off in recent weeks rallied. This included “Magnificent Seven” titans Apple and Nvidia, which were up 3% and 4%, respectively.

Shares of Tesla popped 5% also due to easing tariff pressures and after CEO Elon Musk said during the company’s Tuesday earnings call that his time spent running Trump’s Department of Government Efficiency will drop “significantly” starting next month.

Investors also breathed a sigh of relief as Trump also said that he has “no intention” of firing Powell, whose term as Fed chair will end in May 2026. The comment is a reversal of sorts for the president, who fired off barbs against Powell as recently as Monday, calling the central bank leader a “major loser” and demanding that interest rates come down. Just last week, Trump said in a Truth Social post that Powell’s “termination cannot come fast enough.”

Stocks are coming off of a winning session, with the 30-stock Dow surging more than 1,000 points to end a four-day losing streak. Both the S&P 500 and the Nasdaq Composite jumped more than 2%.