Stocks jump as Trump softens stance on his two most market-unfriendly policies

Traders are continuing to step away from the ledge and into the sunshine this morning as the White House floods the zone with positive policy chatter.

A smattering of positive news on Tuesday after the close is fueling a massive relief rally on Wall Street, with US equity futures up 2.5% in early trading. At their highs of the morning, S&P futures were still about 1.5% below levels seen on April 9, after the president watered down reciprocal tariffs on most nations for 90 days.

President Donald Trump told the press that tariffs on China “will come down substantially” and not be near 145%. When asked if he would play hardball in negotiations with China, the president said no.

The president met with the heads of retail giants on Monday, many of which were facing significant operational challenges and higher costs linked to high levies on imports from the world’s second-largest economy.

And, at least with the UK, the White House also seems to be tackling an issue that limited its ability to find common ground with Japan’s trade negotiators: having clear demands upon which a deal could be ironed out. The Wall Street Journal reported on a draft document that sees US trade negotiators pushing for the UK to cut its auto tariff and relax rules on agricultural imports, among other measures.

The market-friendly tone from the White House wasn’t limited to trade. Trump remarked that he has no intention of firing Fed Chair Jerome Powell, but just wishes that he would be more active in lowering interest rates. Last week, Trump posted on Truth Social that “Powell’s termination cannot come soon enough.”

These headlines all arrived after Bloomberg reported that Treasury Secretary Scott Bessent said that the US and China would find ways to de-escalate in the very near future because the trade war was unsustainable with levies this high. These comments, from an official who has emphasized that it is “Main Street’s turn” for success, came during a private event hosted by JPMorgan in Washington, DC.