Stocks rally as Trump backtracks on China: Tariffs will ‘come down substantially’

Stocks rose on Wednesday as Trump softened his rhetoric against China, announcing that he would reduce the 145% tariff on all goods.

Trump’s latest moderating statements have brought relief to traders. On Wednesday, April 23, the Dow Jones Industrial Average was up 1.47% at 39,774. Still, the index fell from the daily highs above 40,000 points. At the same time, the S&P 500 was up 2.14%, trading at 5,400.74, while the tech-focused Nasdaq was up 3.09%, at 16,803.75.

Trump moderates rhetoric on China, the FED

Major stock indices reacted positively to Donald Trump’s latest comments on trade. Specifically, Trump said that historically high tariffs on China would go down “substantially,” from their current level of 145%. The president also said that he would be “very nice” to China, and wouldn’t play hardball with the Chinese president Xi Jinping.

“It will come down substantially, but it won’t be zero,” Trump said.

Trump’s moderating statements also extended to Federal Reserve Chair Jerome Powell. On Tuesday, Trump stated that he has no intention of firing the Fed chair, whose term will end in 2026. This brought back some confidence in the U.S. dollar, and the dollar index was up 0.73% on Wednesday, reaching 99.66, recovering from its recent multi-year lows.

The latest comments were part of an ongoing de-escalation from the White House to reassure the markets. Both Trump and his administration claimed that trade talks with major partners are going well. This is key, as deals face the looming 90-day deadline, at the time the pause on the highest rates would end.

Still, Trump has shown no indication of removing the baseline 10% tariff on all countries, which is still a substantial increase from previous levels. At the same time, the White House continues to insist that major trading partners are still using non-tariff barriers to influence the balance of trade with the U.S.