Trump’s Powell Reassurance, Tariff Cut Pledge Spark Global Market Rally

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Trump’s Powell Reassurance, Tariff Cut Pledge Spark Global Market Rally

By Agency Report – The Punch
Global stock markets surged on Wednesday after U.S. President Donald Trump stated he had “no intention” of firing Federal Reserve Chairman Jerome Powell and pledged significant tariff cuts on Chinese goods.

Investors, previously rattled by speculation that Trump might remove Powell for failing to cut interest rates, found relief in the president’s comments. The fear of undermining the Fed’s independence and destabilizing the U.S. economy had triggered a sharp market downturn earlier in the week.

“I have no intention of firing him,” Trump affirmed, though he reiterated his call for rate reductions, saying, “It’s a perfect time to lower interest rates… but if he doesn’t, is it the end? No.”

Markets Cheer Trump’s Trade U-Turn

The markets received a double boost as Trump also hinted at a softening of the ongoing trade war with China.

Washington’s tariffs, currently as high as 145% on Chinese goods, and Beijing’s retaliatory 125% duties, have strained global commerce. However, Trump said U.S. tariffs would “come down substantially,” while noting they wouldn’t drop to zero.

Treasury Secretary Scott Bessent echoed the sentiment, stating the tariff standoff is “not sustainable” and hinted at a forthcoming de-escalation.

White House Press Secretary Karoline Leavitt added, “The president and the administration are setting the stage for a deal. The ball is moving in the right direction.”

Meanwhile, Chinese President Xi Jinping criticized the tariffs but kept the diplomatic door open. Foreign Ministry spokesman Guo Jiakun confirmed, “The door for talks is wide open.”

Global Markets React with Optimism

The developments ignited a global stock rally:

New York: Dow Jones surged 2.7% to close at 39,186.98.
Hong Kong: Hang Seng Index soared 2.4%, with tech giants like Alibaba and Tencent leading gains.
Tokyo: Nikkei 225 climbed 1.9% to 34,868.63.
Taipei: Rose over 4%, boosted by a 7% rise in TSMC.
London, Paris, Frankfurt: All posted sharp gains.

Even oil prices rebounded, with West Texas Intermediate rising 1.5% to $64.63 per barrel, and Brent Crude up 1.4% at $68.41.

Gold, which had reached a record $3,500 amid investor panic, slipped back to around $3,300.

Currency markets also saw movement, with the dollar recovering slightly:

Euro/USD: Down to $1.1385
Pound/USD: Down to $1.3305
Dollar/Yen: Up to 141.85

Analysts Cautiously Optimistic

Chris Weston of Pepperstone remarked, “While it is still early days, the mood in the market is evidently shifting.” He added that Trump’s remarks on Powell helped reduce fears of “a major policy mistake.”

The rally came despite the IMF slashing its global economic growth forecast by 0.5 percentage points to 2.8%, blaming the long-running trade tensions.

Corporate Spotlight: Sumitomo Rubber Gains

Japan’s Sumitomo Rubber, recent acquirer of the Dunlop brand, jumped 3.7% after announcing a price hike of up to 25% on tires for U.S. and Canadian vehicles.

Key Global Market Figures (As of 0810 GMT):