Wall Street Rises Amid Hopes for Trade Tension Easing Between US and China

A single statement from Donald Trump regarding a willingness to ease tensions with China brought an atmosphere of euphoria to Wall Street. All three major Wall Street indices recorded strong gains for the second consecutive day following Trump’s statements indicating a less confrontational approach in trade negotiations with China. Trump noted that the current 145% tariff on Chinese imports is “too high” and will not remain so, adding that it will be significantly reduced but not eliminated entirely. Markets responded favorably to Trump’s assurance that he does not intend to remove Federal Reserve Chairman Jerome Powell from his position. Consequently, the industrial index, Dow Jones, rose by 1.0%. The S&P 500 strengthened by 1.6%, while the Nasdaq gained 2.5%. Meanwhile, the euro-dollar exchange rate fell to 1.1327, and yields on U.S. Treasury bonds for 10 years stood at 4.384%. Despite the slight stock market rebound, the dollar remains at low levels compared to pre-tariff announcement rates, and bond yields are far from the 3.9% they reached shortly after Trump’s inauguration. U.S. Treasury Secretary Scott Bessen also stated on Wednesday (April 23, 2025) that the U.S. and China have the opportunity to make a “big deal” on trade. The Wall Street Journal reported on Wednesday, citing a White House official, that the administration is considering reducing China’s tariffs to between 50% and 65%. A White House official later told CNBC that such a move should be bilateral, with China also reducing its trade barriers.