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American actions climbed after Donald Trump said he did not intend to dismiss the president of the federal reserve Jay Powell, raising concerns about the independence of the country’s central bank that had shaken the markets this week.
The S&P 500 ended on Wednesday 1.7% on Wednesday, although the Wall Street reference withdrawn previous gains of more than 3% during the last volatile negotiation session. The heavy nasdaq composite index in technology has climbed 2.5%, while Europe actions also made of gains.
The moves came after the president was late Tuesday reiterated his frequent complaint that the Fed necessary to reduce borrowing costsBut added: “I don’t want to talk about it because I have no intention to shoot [Powell]. “”
“The markets will welcome his vote of trust (drying), but damage to the independence of the Fed have been caused,” said Dario Perkins, of the TS Lombard, in a note to customers. “Trump wants rate drops, but his vicious attacks against Powell have made more difficult for the central bank to deliver.”
The actions had also been stimulated by a potential relaxation of trade tensions with Beijing, after Trump also said on Tuesday that the prices on Chinese products “would decrease considerably”.
However, Wall Street’s clues abandoned some of their first winnings later Wednesday after the secretary of the Treasury, Scott Bessent should be mutual.
“There should be a de-escalation on both sides,” he said, adding that the tariffs that the two countries had imposed themselves have equipped themselves with an “embargo”.
“A break between the two countries on trade is not suitable for anyone’s interests,” said Bessent.
Charlie McElligott, a strategist of actions derivatives at Nomura, said that a “massive piece” of previous purchases on Wednesday had been motivated by hedge funds covering their short positions.
The US dollar increased by 0.9% against a peer basket, although the currency continues to hover around several years having dropped by more than 8% this year.
Brent Crude, the international oil reference index, dropped by 1.9% to $ 66.17 per barrel while traders weighed the possibility that OPEC + Accelerate production increases in June.
The Broad Stoxx Europe 600 index increased 1.8% on Wednesday, and the German Dax index extended recent gains with an increase of 3.1%.
The 10 -year -old American treasury yield was slightly less than 4.38%. Bond yields come opposite prices.
Wednesday’s movements come after a volatile month for the financial markets after the pricing announcements of Trump’s “Liberation Day”, which sparked a drop of several days for American actions. The S&P 500 remains more than 8% less so far this year despite the rebound this week.
The technological actions have been even harder, the NASDAQ composite index losing more than 13% since the beginning of 2025.
Despite this week’s earnings, investors remained suspicious. “There could be short-term help because the risk of the tail of the US economy exploding has been reduced, but is the level of uncertainty suddenly gone? No,” said Max Kettner, multi-network multi-grinding strategist at HSBC.
The markets were shaken last week after Trump, who was a persistent critic of Powell, said that he thought he could reject the president of the Fed before the end of his mandate in May 2026.
Bessent said on Wednesday that he had no position to find out if Trump had the power to dismiss the president of the Fed. “I am not a lawyer, I have no position on it,” said the secretary to the treasure.
But Bessent said that Trump’s statement on Tuesday that he did not intend to dismiss Powell was in accordance with the president’s comment last week that the “termination” of the central banker could not come “fast enough”.
“The word termination – Terminus – can also mean the end, and” I cannot wait for his termination “… He could just mean May 2026,” said Bessent.
Salman Ahmed, world leader in the allocation of macro and strategic assets at Fidelity International, described the confrontation between the White House and the Fed as “a manifestation of a fundamental tension” in the economy.
He said that Trump’s pricing policies “exerted pressure on Fed’s double mandate” by increasing inflationary pressures while injuring growth.
“This tension will not fundamentally disappear as long as we do not know where the prices will settle,” said Ahmed. “The daily information flow will lead to high volatility.”
Additional report by Ray Douglas in London and George Steer in New York
