WASHINGTON (dpa-AFX) - Following a substantial move to the upside early in the session, stocks gave back ground over the course of the trading day on Wednesday but held on to strong gains. The major averages all ended the day sharply higher, with the Nasdaq posting a particularly strong gain.
The Nasdaq soared as much as 4.5 percent in early trading before pulling back but still closed up 407.63 points or 2.5 percent at 16,708.05. The S&P 500 also shot up 88.10 points or 1.7 percent to 5,375.86 and the Dow jumped 419.59 points or 1.1 percent at 39,606.57.
Stocks initially extended Tuesday's rally after President Donald Trump appeared to soften his stance on Federal Reserve Chair Jerome Powell.
'I have no intention of firing him,' Trump told reporters on Tuesday but reiterated he would like to see Powell and the Fed resume lowering interest rates.
Trump's attacks on Powell, including calling him a 'major loser' as recently as Monday, had led to anxiety on Wall Street about the Fed's independence.
The president also suggested he's willing to take a less confrontational approach to trade talks with China, predicting the current 145 percent tariff on Chinese imports will 'come down substantially.'
Adding to the positive sentiment, Treasury Secretary Scott Bessent said there is an 'opportunity for a big deal' between the U.S. and China.
'If they want to rebalance, let's do it together,' Bessent said during an appearance at the Institute of International Trade and Finance in Washington, D.C. 'This is an incredible opportunity.'
Buying interest waned over the course of the session, however, as traders continue to express concerns about recent volatility in the markets triggered largely by Trump's words.
'There seems to be something different in the air. Instead of the bluster, threats and hiked tariffs which have been the hallmark of Donald Trump's administration over the past few months, a more conciliatory tone seems to be emanating from the White House,' said AJ Bell head of financial analysis Danni Hewson.
She added, 'Of course, one post on Truth Social could set the rollercoaster back on another circuit, but even the US president must have felt a bit ruffled when he saw the perfect storm of falling equities, a battered dollar and rising US Treasury yields.
Despite the pullback by the broader markets, shares of Tesla (TSLA) remained sharply, with the electric vehicle maker surging by 5.3 percent.
The spike by Tesla came after the company reported weaker than expected first quarter results but CEO Elon Musk said amount of time he spends with the Department of Government Efficiency will decline 'significantly' beginning in May.
Sector News
Despite the pullback by the broader markets computer hardware stocks held on to substantial gains, with the NYSE Arca Computer Hardware Index spiking by 4.0 percent.
Semiconductor, networking and software stocks also saw continued strength throughout the day, contributing to the surge by the tech-heavy Nasdaq.
Outside of the tech sector, considerable strength also remained visible among airline stocks, as reflected by the 2.4 percent jump by the NYSE Arca Airline Index.
Financial, retail and steel stocks also saw closed significantly higher, while gold stocks bucked the uptrend amid a steep drop by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.9 percent, while Hong Kong's Hang Seng Index surged by 2.4 percent.
The major European markets also showed strong moves to the upside on the day. While the German DAX Index spiked by 3.1 percent, the French CAC 40 Index shot up by 2.1 percent and the U.K.'s FTSE 100 Index advanced by 0.9 percent.
In the bond market, treasuries gave back ground after an early surge, closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.387 percent after hitting a low of 4.261 percent.
Looking Ahead
Reports on weekly jobless claims, durable goods orders and existing home sales may attract attention on Thursday but are likely to be overshadowed by any developments on the trade front.
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