The easing of US-China trade tensions and policy shifts has invigorated Wall Street stocks, leading to consecutive rebounds.
On April 23, 2025, the U.S. stock market rebounded for the second day in a row as the easing of U.S.-China trade tensions and the stability of Federal Reserve policies boosted investor sentiment. The Dow Jones Industrial Average rose over 400 points, with the S&P 500 and Nasdaq indices also moving higher. Trump softened his stance on tariffs and the appointment of Federal Reserve Chairman Jerome Powell, leading tech stocks to drive the gains. Although intraday gains hit historical highs at one point, some gains were lost by the close, indicating that the market remains sensitive.
Key Updates
04/24 01:00
The easing of US-China trade tensions and policy shifts has invigorated Wall Street stocks, leading to consecutive rebounds.
On April 23, 2025, the U.S. stock market rebounded for the second day in a row as the easing of U.S.-China trade tensions and the stability of Federal Reserve policies boosted investor sentiment. The Dow Jones Industrial Average rose over 400 points, with the S&P 500 and Nasdaq indices also moving higher. Trump softened his stance on tariffs and the appointment of Federal Reserve Chairman Jerome Powell, leading tech stocks to drive the gains. Although intraday gains hit historical highs at one point, some gains were lost by the close, indicating that the market remains sensitive.
Signals of Easing Trade War Emerge, Investor Sentiment Improves
At the beginning of this week, U.S. President Trump signaled a significant shift in tariff policy towards China in a series of public statements. He stated that tariffs on Chinese imports "won't be that high" and hinted at possibly lowering the current tariff rate, which is currently as high as 145%, to between 50% and 65%. This statement echoes the remarks of Treasury Secretary Scott Bessent at the JPMorgan Investor Summit, who noted that "the current tariff levels are unsustainable" and anticipated that the U.S. and China would reach a de-escalation agreement in the near future.
These statements have been interpreted by the market as clear signals of a potential turning point in the U.S.-China trade war. According to The Wall Street Journal, discussions are underway within the White House regarding a tariff reduction plan. Although no final decision has been made, it has been enough to boost market risk appetite.
Federal Reserve's Independence Secured, Easing Policy Uncertainty
In addition to the shift in trade policy, Trump also made it clear this week that he has "no intention" of removing Federal Reserve Chairman Powell from his position. Previously, Trump had repeatedly criticized Powell and even hinted at possibly replacing him, raising concerns about the Fed's independence. This change in stance has relieved investors, who see it as a positive signal for policy stability.
The Federal Reserve's Beige Book, released on the same day, indicated that while overall economic activity remains stable, businesses in several regions are showing cautious attitudes towards future prospects. Some companies are choosing to delay hiring and investment plans, reflecting the potential impact of trade policy uncertainty on the real economy.
Major Indices Rise, Led by Technology and Semiconductors
Driven by the aforementioned positive news, major U.S. stock indices rose across the board. The Dow Jones Industrial Average increased by 419.59 points, or 1.07%, closing at 39,606.57 points; the S&P 500 Index rose by 88.10 points, or 1.67%, closing at 5,375.86 points; the Nasdaq Index surged by 407.63 points, or 2.50%, closing at 16,708.05 points. The Philadelphia Semiconductor Index performed the strongest, rising by 3.96%, closing at 3,983.92 points.
Technology stocks were the main drivers of this rebound. Tesla's stock price soared by 5.37%, closing at $250.74, despite its earnings report showing a significant decline in profits. However, CEO Musk's announcement to reduce involvement in government affairs and focus on company operations boosted market confidence. Intel also gained investor approval for its layoff reform plan, with its stock price rising by 5.54%. The "Big Tech" stocks all rose, with Amazon, Meta, Nvidia, Alphabet, Apple, and Microsoft seeing gains between 2% and 4%.
Bond and Forex Markets React in Tandem, Treasury Yields Decline
Alongside the stock market, the bond market also saw significant changes. The yield on the 10-year U.S. Treasury fell from 4.41% the previous day to 4.27%, reflecting the market's conservative outlook on future economic prospects and expectations for policy stability. The yield on the 2-year U.S. Treasury, however, rose from a previous decline to 3.867%, indicating that short-term interest rate expectations remain flexible.
The U.S. dollar index strengthened due to the warming of risk assets, appreciating by 1.2% against the yen and 0.84% against the euro. Gold prices fell by 2.6%, indicating a weakening demand for safe-haven assets.
Global Markets Rebound in Sync, Asian and European Stocks Rise
Wall Street's rebound also led to a simultaneous rise in global stock markets. Major European stock markets rose across the board, with France's CAC 40 Index up by 2.13% and Germany's DAX Index up by 3.14%. In Asia, Japan's Nikkei Index rose by 1.89%, Hong Kong's Hang Seng Index rose by 2.4%, and the MSCI Asia Pacific (excluding Japan) Index rose by 1.99%. The Shanghai stock market, however, slightly declined by 0.1%, bucking the trend.
Investor Sentiment Turns Cautiously Optimistic
Despite the strong market rebound, most indices gave back some of their gains by the end of the trading session, indicating that investors remain cautious about the sustainability of the rebound. Globalt Investments portfolio manager Buchanan noted, "The market breathed a sigh of relief, hoping the worst of the discussions is over, but we're not at the final stage yet."
Analysts generally believe that the market remains in a highly volatile state, and future trends will depend on the progress of trade negotiations and policy clarity. Nonetheless, the short-term policy easing has injected a dose of confidence into the market, allowing investors to catch their breath.
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