NEW YORK (AP) 鈥� U.S. stocks rose Wednesday as a worldwide rally came back around to Wall Street after appeared to back off and .
The S&P 500 climbed 1.7% and added to its from Tuesday that more than made up for a on Monday. The Dow Jones Industrial Average rose 419 points, or 1.1%, and the Nasdaq composite gained 2.5%.
Wall Street鈥檚 gains followed strong moves higher for stocks across much of Europe and Asia. They also continued a dizzying, up-and-down run for financial markets as investors struggle with how to react to so much uncertainty about what Trump will do with his economic policies.
The market鈥檚 latest move was up in part because Trump said late Tuesday that he has 鈥渘o intention鈥� to fire of the Federal Reserve. Trump had been angry with Jerome Powell, whom Trump had called 鈥渁 major loser,鈥� because of the Fed鈥檚 .
Trump鈥檚 tough talk had frightened investors because the Fed is supposed to act independently, without pressure from politicians, so that it can make decisions that may be painful in the short term but are best for the long term.
While a cut to interest rates by the Fed could give the economy a boost, it could also put upward pressure on inflation. Economists say Trump鈥檚 tariffs are likely both to slow the economy and to raise inflation, at least briefly.
Trump may have recognized the market鈥檚 fear about a move against Powell. He may also be looking to keep someone around whom Trump could blame later if the economy does fall into a recession, according to Thierry Wizman, a strategist at Macquarie.
鈥淚ndeed, if the Fed cuts its policy interest rates aggressively, Trump would have little excuse for a recession apart from the pugnacity of his tariff policies,鈥� Wizman said.
Markets also rose after Trump said late Tuesday that U.S. tariffs on imports coming from China could come down 鈥渟ubstantially鈥� from the current 145%. 鈥淚t won鈥檛 be that high, not going to be that high,鈥� Trump said.
The hope along Wall Street has been that Trump would lower his tariffs after negotiating trade deals with other countries, and Trump said Tuesday he would be 鈥渧ery nice鈥� to the world鈥檚 second-largest economy and not play hardball with Chinese President .
鈥淭here is an opportunity for a big deal here,鈥� U.S. Treasury Secretary .
If Trump brings his tariffs down enough, investors believe a recession could be averted.
U.S. businesses say they鈥檙e already feeling the effects of the trade war. A preliminary reading of U.S. business activity fell to a 16-month low, as the threat of tariffs helped push up prices charged for goods and services, according to S&P Global鈥檚 latest survey released Wednesday.
All the uncertainty means one of the few predictions many along Wall Street are willing to make is that sharp swings for financial markets will continue for a while. The market will 鈥渕ore likely than not continue to be dictated by Trump鈥檚 latest whims regarding tariffs and trade,鈥� said Tim Waterer, chief market analyst at KCM Trade.
The S&P 500 remains 12.5% below its record set earlier this year after briefly dropping roughly 20% below the mark. Its swings have been coming not just day to day but also hour to hour as Trump and his administration鈥檚 officials continue to surprise markets. On Wednesday alone, the S&P 500 charged to a 3.4% gain in the morning, only to more than halve that rise as the day progressed.
Trump鈥檚 latest comments had a relaxing effect on the bond market, where Treasury yields eased. It鈥檚 a turnaround from earlier this month, when spiking Treasury yields raised fears that Trump鈥檚 actions were scaring investors away from the United States and weakening the U.S. bond market鈥檚 reputation as one of the safest places to keep cash.
The yield on the 10-year Treasury fell to 4.38% from 4.41% late Tuesday. It dropped as low as 4.26% earlier in the morning.
On Wall Street, Big Tech helped lead stock indexes higher.
Nvidia rose 3.9% to claw back more of the sharp losses it took last week, when it said U.S. restrictions on exports of its H20 chips to China could hurt its first-quarter results by $5.5 billion. The chip company鈥檚 stock was the strongest single force lifting the S&P 500.
Other stocks in the artificial-intelligence technology ecosystem also drove higher. Vertiv Holdings, which traces its roots to the industry鈥檚 first manufacturer of computer room air conditioning, jumped 8.5% after reporting stronger profit and revenue for the latest quarter than analysts expected. It said it鈥檚 continuing to see accelerated demand from AI data centers.
Super Micro Computer, a company that makes servers used in AI, rose 7.6%. Palantir Technologies, which offers an AI platform for customers, climbed 7.3%.
Tesla revved 5.4% higher after CEO and more time running his electric vehicle company after Tesla on late Tuesday reported a big drop in profits. It鈥檚 been struggling because of against Musk鈥檚 efforts to lead cost-cutting efforts by the U.S. government.
All told, the S&P 500 rose 88.10 points to 5,375.86. The Dow Jones Industrial Average added 419.59 to 39,606.57, and the Nasdaq composite gained 407.63 to 16,708.05.
In stock markets abroad, indexes jumped 2.1% in France, 2.4% in Hong Kong and 1.9% in Japan. Stocks in Shanghai were an exception, where they dipped 0.1%.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
Stan Choe, The Associated Press
