Stock Market Surges As Trump Cools Down on Tariffs, Clarifies He Won’t Fire Fed Chair Powell

Published: April 23, 2025 by Omor IE

Key Points

The stock market has surged today after Trump clarified that he has no intention to fire Jerome Powell.
He also hinted that tariffs on China will come down.
The White House said that tariffs won’t be lowered unilaterally and would happen as negotiations take place with China.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.^(Sponsor)

The stock market’s recovery was derailed significantly, and Wall Street sentiment softened due to President Donald Trump’s repeated comments about the Federal Reserve Chair Jerome Powell. He named him “Mr. Too Late” and warned of a slowdown if interest rates weren’t cut fast. Moreover, he earlier said that his termination couldn’t come fast enough, and many headlines came out on the president exploring pathways to fire Powell.

Fortunately for Wall Street, this does not seem to be the case. Trump has clarified that he has no intention of firing Jerome Powell. Not only that, he made further comments about de-escalating the trade war with China. He said that tariffs will not remain at 145%, but they will be higher than before as both countries reach a deal. No timeframe has been given for this, but the market is certainly happy.

Here’s a market update as of 10:00 A.M (ET) today.

The S&P 500 is up 165.13 points, or 3.12%.
The Nasdaq Composite is up 649.2 points, or 3.98%.
The Dow Jones Industrial Average is up 1,067.23 points, or 2.72%.

A “Dovish” Trump Lifts Markets

The Wall Street Journal reported that President Donald Trump decided not to fire Powell after Bessent and Lutnick raised concerns. Senator Elizabeth Warren warned that stocks would crash if he were to be fired.

The stock market would likely react negatively if Jerome Powell were to be fired, since there are examples of things going badly if central banks have their independence compromised. For example, Turkey has been dealing with dangerous levels of inflation being entrenched due to the country’s president repeatedly interfering with its central bank’s policy.

Given that Trump will not be firing Jerome Powell, the stock market has reacted positively. The stock market also likes the talk about lower tariffs on China down the line. The White House is considering slashing China tariffs to de-escalate, and could come down to between 50% and 65%.

That said, a White House official said that the United States will not do anything unilaterally. Lower tariffs are expected to only come once negotiations with China take place. There have been no public negotiations taking place with China, and both countries are still locked in a trade war. This likely means that current tariffs will stay in place for longer.

Macros

US S&P Composite PMI Flash came in at 51.2 vs. the 52 forecast.
US S&P Services PMI Flash came in at 51.4 vs. the 52.6 forecast.
US S&P Manufacturing PMI Flash came in at 50.7 vs. the 49 forecast.
New home sales came in at 724,000 vs. the 685,000 estimate.

Other Assets

Gold prices are down 3.4% to $3,303/oz due to uncertainty coming down as there are talks of lower tariffs on China, and the uncertainty regarding Powell has simmered down.
Crude Oil Futures are down slightly to $63.3.
Natural Gas Futures are 0.8% higher at $3.6.
Bitcoin has continued climbing and is up 0.5% today to $93,672.