Wall Street leaps in a worldwide rally after Trump softens his tough talk on trade and the Fed

NEW YORK AP U S stocks are leaping Wednesday as a worldwide rally comes back around to Wall Street after President Donald Trump appeared to back off his criticism of the Federal Reserve and his tough talk in his exchange war The S P was higher in midday trading coming off a big gain Tuesday that more than made up for its steep loss on Monday The Dow Jones Industrial Average was up points or as of a m Eastern time and the Nasdaq composite was higher Wall Street s gains followed strong moves higher for stocks across much of Europe and Asia They also continue 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 S P remains below its record set earlier this year after briefly dropping roughly below the mark The region s latest move is up in part because Trump announced late Tuesday that he has no intention to fire the head of the Federal Reserve Trump had been angry with Jerome Powell whom Trump had called a major loser because of the Fed s hesitance to cut interest rates While cutting rates could give the business sector a boost it could also put upward pressure on inflation Economists say Trump s tariffs are likely both to slow the commercial sector and to raise inflation at least briefly Trump s 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 Trump may have recognized the domain s fear about a move against Powell He may also be looking to keep someone around whom Trump could blame later if the financial market does fall into a recession according to Thierry Wizman a strategist at Macquarie Indeed if the Fed cuts its approach interest rates aggressively Trump would have little excuse for a recession apart from the pugnacity of his tariff policies Wizman revealed Markets also rose after Trump disclosed late Tuesday that U S tariffs on imports coming from China could come down substantially from the current It won t be that high not going to be that high Trump announced The hope along Wall Street has been that Trump may lower his tariffs after negotiating pact deals with other countries and Trump noted Tuesday he would be very nice to the world s second-largest financial market and not play hardball with Chinese President Xi Jinping There is an opportunity for a big deal here U S Treasury Secretary Scott Bessent explained in a Wednesday morning speech If Trumps brings his tariffs down by enough and swiftly enough investors believe a recession could be averted U S businesses say they re already feeling the effects of the commerce war A preliminary reading of U S business activity fell to a -month low as the threat of tariffs helped push up prices charged for goods and services at the sharpest rate for just over a year according to S P Global s latest survey distributed Wednesday That s why one of the limited predictions various along Wall Street are willing to make is only that sharp swings for financial markets will continue for a while The territory will more likely than not continue to be dictated by Trump s latest whims regarding tariffs and commerce revealed Tim Waterer chief field analyst at KCM Bargain Trump s comments also had a big effect on the bond region where Treasury yields eased It s a turnaround from earlier this month when spiking Treasury yields raised fears that Trump s actions were scaring investors away from U S investments and weakening the U S bond area s reputation as one of the safest places to keep cash The yield on the -year Treasury fell to from late Tuesday That s a notable move for the bond domain which measures things in hundredths of percentage points On Wall Street Big Tech helped lead a widespread rally where the majority U S stocks climbed Nvidia rose to claw back more of the sharp losses it took last week when it reported U S restrictions on exports of its H chips to China could hurt its first-quarter results by billion The chip company s stock was the strongest single force lifting the S P Other stocks in the artificial-intelligence mechanism ecosystem also helped lead the way Vertiv Holdings which traces its roots to the industry s first manufacturer of computer room air conditioning jumped after reporting stronger profit and revenue for the latest quarter than analysts expected It announced it s continuing to see accelerated demand from AI content centers Super Micro Computer a company that makes servers used in AI leaped for the biggest gain in the S P Palantir Technologies which offers an AI platform for customers climbed Tesla revved higher after CEO Elon Musk disclosed he ll spend less time in Washington and more time running his electric van company Tesla on late Tuesday shared a big drop in profits It s been struggling because of backlash against Musk s efforts to lead cost-cutting efforts by the U S regime In stock markets abroad indexes jumped in France in Hong Kong and in Japan Stocks in Shanghai were an exception where they dipped AP Business Writers Yuri Kageyama and Matt Ott contributed Source