Trump Implies Flexibility In Talks with China – US Market Wrap

Signs Trump is reconsidering the more aggressive aspects of his trade views, and the Federal Reserve has propelled stocks to their first back-to-back gains since his tariff battle erupted, while calming volatility across asset classes.

The S&P 500 rose 1.7%, though it pared an earlier rally that had swelled to as much 3.4%, as traders tried to evaluate how seriously to take pronouncements of flexibility in negotiations with China and other trading partners.

After a report that the US would be willing to phase in lighter tariffs on China over five years on Wednesday, Trump told reporters that China was “going to do fine” once discussions had settled. Meantime, Treasury Secretary Bessent said Trump hasn’t offered to take down US tariffs on China on a unilateral basis.

Long-maturity Treasury yields fell after Trump allayed fears that he would dismiss Fed Chair Powell. The greenback climbed. The yen fell when Bessent stated America will not pursue specific exchange rate targets in its negotiations with Japan. Bitcoin rose, while haven trades such as gold declined.

Boeing’s results beat estimates. Tesla rose after Elon Musk vowed to dramatically reduce his engagement with the government, assuaging investors concerned about the company’s profitability.