Wall Street leaps nearly 3% as markets worldwide rally

NEW YORK AP U S stocks are leaping Wednesday as a worldwide rally comes back around to Wall Street following updates from President Donald Trump about his plans for the Federal Reserve and his deal war that investors uncovered encouraging The S P was higher in morning trading coming off a big gain Tuesday that more than made up for its steep loss on Monday The Dow Jones Industrial Average was up points or as of a m Eastern time and the Nasdaq composite was higher Wall Street s gains followed strong moves higher for stocks across much of Europe and Asia They also continue a dizzying up-and-down run for markets as investors struggle with how to react to so much uncertainty about what Trump will do with his economic policies The S P remains below its record set earlier this year after briefly dropping roughly below The territory s latest move is up in part because Trump explained late Tuesday that he has no intention to fire the head of the Federal Reserve Trump had been angry with Jerome Powell whom Trump had called a major loser because of the Fed s hesitance to cut interest rates While cutting rates could give the financial system a boost it could also put upward pressure on inflation Economists say Trump s tariffs are likely both to slow the business activity and to raise inflation at least briefly Trump s tough talk frightened investors because the Fed is supposed to act independently without pressure from politicians so that it can make decisions that may be painful in the short term but are best for the long term Trump may have recognized the domain s fear about a move against Powell He may also be looking to keep someone around whom Trump could blame later if the business activity does fall into a recession according to Thierry Wizman a strategist at Macquarie Indeed if the Fed cuts its agenda interest rates aggressively Trump would have little excuse for a recession apart from the pugnacity of his tariff policies Wizman noted Markets also rose after Trump disclosed late Tuesday that U S tariffs on imports coming from China could come down substantially from the current It won t be that high not going to be that high Trump explained The hope along Wall Street has been that Trump may lower his tariffs after negotiating arrangement deals with other countries and Trump disclosed Tuesday he would be very nice to China and not play hardball with Chinese President Xi Jinping If Trumps brings his tariffs down by enough and hurriedly investors believe a recession could be averted U S businesses say they re already feeling the effects of the deal war A preliminary reading of U S business activity fell to a -month low as the threat of tariffs helped push up prices charged for goods and services at the sharpest rate for just over a year according to S P Global s latest survey disclosed Wednesday That s why one of the sparse predictions countless along Wall Street are willing to make is only that sharp swings for financial markets will continue for a while The field will more likely than not continue to be dictated by Trump s latest whims regarding tariffs and deal revealed Tim Waterer chief domain analyst at KCM Exchange Trump s comments also had a big effect on the bond sphere where Treasury yields eased It s a turnaround from earlier this month when spiking Treasury yields were raising fears that Trump s actions were scaring investors away from U S investments and weakening the U S bond realm s reputation as one of the safest places to keep cash The yield on the -year Treasury fell to from late Tuesday That s a notable move for the bond industry which measures things in hundredths of percentage points On Wall Street Big Tech helped lead a widespread rally where the bulk U S stocks climbed Nvidia rose to claw back more of the sharp losses it took last week after saying U S restrictions on exports of its H chips to China could hurt its first-quarter results by billion Other stocks in the artificial-intelligence hardware ecosystem also helped lead the way Vertiv Holdings which traces its roots to the industry s first manufacturer of computer room air conditioning jumped after reporting stronger profit and revenue for the latest quarter than analysts expected It revealed it s continuing to see accelerated demand from AI records centers Tesla revved higher after CEO Elon Musk mentioned he ll spend less time in Washington and more time running his electric truck company Tesla on late Tuesday broadcasted a big drop in profits and it has been struggling because of backlash against Musk s efforts to lead cost-cutting efforts by the U S executive In stock markets abroad indexes jumped in France in Hong Kong and in Japan Stocks in Shanghai were an exception where they dipped