US stocks surged on Wednesday, with the S&P 500 climbing 2.6%, the Nasdaq soaring 3.6%, and the Dow Jones gaining over 800 points, extending the strong rebound seen on Tuesday.
US stocks soar on Wednesday
Consumer discretionary, technology, and communication services sectors led the rally, as investor sentiment improved across the board. Optimism was driven by President Trump’s comments that he had no intention of dismissing Federal Reserve Chair Jerome Powell, alleviating concerns over political interference in US monetary policy. This helped restore some stability to the markets, which had been rattled by worries over the independence of the central bank.
Trump also adopted a more conciliatory tone toward China, stating that he plans to be “very nice” in future trade negotiations, which fueled hopes of a de-escalation in the ongoing trade tensions between the two economic giants. This shift in rhetoric reassured investors that a trade resolution could be on the horizon, further boosting market sentiment.
Earnings season remains in focus
Earnings season remained in focus, with several high-profile companies reporting mixed results. Tesla shares surged around 4% after CEO Elon Musk pledged to "significantly" scale back his involvement in government matters following criticism that he had neglected the company. However, Tesla’s Q1 results fell short of expectations, with automotive revenue down 20% compared to the same period last year, raising concerns about demand and production challenges. On the other hand, Boeing saw a nearly 9% increase in its stock price after reporting a smaller-than-expected adjusted loss per share, signaling potential stabilization in the aerospace giant's financials.
As markets continued to digest earnings reports and comments from key political figures, the rally on Wall Street was marked by renewed investor confidence, driven by a combination of positive earnings surprises, easing political tensions, and expectations of a shift toward more favorable trade relations. Despite ongoing global uncertainties, the day’s gains provided a much-needed boost to sentiment, leaving investors optimistic about the near-term economic outlook.
