Asian equities mounted a welcome relief rally after President Donald Trump assured investors he had no intention of dismissing Federal Reserve Chair Jerome Powell and signalled he could lower tariffs on Chinese goods.
The dollar spiked against major currencies once Trump shelved his threat to oust Powell.
Trump also restated his desire for a trade deal with Beijing, saying any duties would come nowhere near 145 %, and warning he would dictate the terms if China stayed away from the table.
Earlier in the day, Treasury Secretary Scott Bessent predicted U.S.–China tensions would eventually ease, though he cautioned that formal talks had yet to start and would likely be a “slog.”
Investors snapped up battered shares: Japan’s Nikkei rose 1.9 %, while South Korea’s KOSPI added 1.6 %.
U.S. markets followed suit. The Dow Jones Industrial Average climbed 2.7 % to 39,186.98; the S&P 500 gained 2.5 % to 5,287.76; and the Nasdaq Composite advanced 2.7 % to 16,300.42.
In fixed income, the 10-year U.S. Treasury yield eased to 4.400 %, down from Monday’s 4.421 %.
