Wall Street stocks surge on hopes of US-China trade deal

White House Press Secretary Karoline Leavitt speaks during a news conference in the Brady Press Briefing Room at the White House on April 22, 2025 in Washington, DC. Leavitt faced questions about President Donald Trump’s upcoming visit to the Middle East, the immigration status for Afghan refugees and other subjects. Chip Somodevilla/Getty Images/Agence France-Presse

NEW YORK, United States — Wall Street stocks rebounded Tuesday on upbeat remarks by US officials about trade talks with China, after gold earlier hit a record on jitters surrounding tariffs and other issues.

All three major US indexes rose by more than two percent following White House Press Secretary Karoline Leavitt’s comments that Trump was “setting the stage for a deal with China.”

The Dow ended 2.7 percent higher while the broad-based S&P 500 climbed 2.5 percent.

Europe’s main indexes logged gains as well, as the region’s trading resumed after a long-weekend break for Easter.

Earlier Tuesday, gold reached $3,500 an ounce for the first time as Trump’s sweeping tariffs and verbal assault on Federal Reserve policies prompted investors to snap up the safe-haven asset.

READ: Trump says US ‘talking’ to China on tariffs

Asian indexes closed mixed, while oil prices firmed.

“Looking at today’s rebound for equities, you might be forgiven for thinking that financial markets have forgotten all about Trump’s threats to fire Powell,” said IG analyst Chris Beauchamp, referring to Fed chairman Jerome Powell.

Panicked Wall Street investors dumped US assets on Monday, with all three main indexes ending down around 2.5 percent, after Trump took another in a series of swipes at the Fed chair.

The president last week criticized Powell over the latter’s warning that the White House’s sweeping levies would likely reignite inflation.

Trump sent shivers through markets Monday by again calling on Powell to make pre-emptive cuts to US interest rates.

The outbursts have fanned concern that Trump is preparing to oust the head of the US central bank. Trump’s top economic adviser Kevin Hassett said Friday that the president was looking at whether he could do so.

But Wall Street rebounded strongly on Tuesday.

Briefing.com analyst Patrick O’Hare put part of the rebound down to sentiment that Trump would not fire Powell, and instead was “simply setting him up now to take the blame in the event of an economic downturn.”

Markets also climbed after US Treasury Secretary Scott Bessent told a closed-door event in Washington that he expected a de-escalation soon in the United States’ tariff standoff with China.

Later in the day, Leavitt told reporters that “the president and the administration are setting the stage for a deal,” noting that “the ball is moving in the right direction.”

All eyes were on Tesla, too, as the company reported financial results after the closing bell.

It announced a 71-percent drop in first-quarter profits Tuesday, in results that lagged analyst estimates. The electric vehicle producer warned of a hit to demand due to “changing political sentiment.”

Tesla shares were up 0.4 percent in after-hours trading.

Its shares have tanked more than 35 percent from the start of the year as Elon Musk’s political role in the Trump administration has dented the brand’s image. The carmaker has also been caught up in tariff turmoil.

Separately, investors largely shrugged off the International Monetary Fund saying Trump’s new tariff policies would take a big bite out of global growth, with many already having factored in their impact.

The IMF now sees the global economy growing by 2.8 percent this year, 0.5 percentage points lower than its previous forecast in January.

Key figures at 2030 GMT (4:30 a.m. Manila time)

• New York – Dow: UP 2.7 percent at 39,186.98 points (close)
• New York – S&P 500: UP 2.5 percent at 5,287.76 (close)
• New York – Nasdaq Composite: UP 2.7 percent at 16,300.42 (close)
• London – FTSE 100: UP 0.6 percent at 8,328.60 (close)
• Paris – CAC 40: UP 0.6 percent at 7,326.47 (close)
• Frankfurt – DAX: UP 0.4 percent at 21,293.53 (close)
• Tokyo – Nikkei 225: DOWN 0.2 percent at 34,220.60 (close)
• Hong Kong – Hang Seng Index: UP 0.8 percent at 21,562.32 (close)
• Shanghai – Composite: UP 0.3 percent at 3,299.76 (close)
• Euro/dollar: DOWN at $1.1420 from $1.1510 on Monday
• Pound/dollar: DOWN $1.3330 at $1.3377
• Dollar/yen: UP at 141.56 yen from 140.89 yen
• Euro/pound: DOWN at 85.67 pence from 86.03 pence
• Brent North Sea Crude: UP 1.8 percent at $67.44 per barrel
• West Texas Intermediate: UP 2.0 percent at $64.31 per barrel

—Agence France-Presse