3:42 p.m.
Stocks hold gains despite economic unease
Stocks were holding onto sizable gains Wednesday as many investors cheered the possibility trade talks between the United States might at least start.
At the same time, President Trump’s announcement he wouldn’t try to remove Federal Reserve Chairman Jerome Powell cheered the market, too.
The market’s gains came despite a report from the Federal Reserve that uncertainty about international trade was pervasive across the country.
At 3:40 p.m. ET, the Standard & Poor’s 500 index was up 1.3% at 5,350. The Dow Jones industrial Average was up 330 points, or 0.9%, to 39,525. The tech heavy Nasdaq Composite Index was up 2.2% to 16,654.54. The index was led by such stalwarts as Tesla (TSLA) , Amazon.com (AMZN) and Nvidia (NVDA) .
The Fed’s Beige Book report, compiled by the Fed’s 12 regional banks, noted deep uncertainty about tariffs and the state of the economy. The Cleveland Fed noted consumers were buying new vehicles now to get ahead of tariffs.
Bessent continues to say China tariff situation unsustainable
The China talk started Tuesday when Treasury Secretary Scott Bessent said the tariff situation with China was unsustainable. The U.S. is imposing tariffs of up 145% on some Chinese imports.
Then, the president said he might consider knocking the tariffs down to something around 50%. There were thoughts he might make the cut unilaterally. The White House said there would be no unilateral cuts.
Meanwhile, China was content to wait.
“Our doors are open, if the U.S. wants to talk,” a statement from the Chinese embassy said on Wednesday. “If a negotiated solution is truly what the U.S. wants, it should stop threatening and blackmailing China and seek dialogue based on equality, respect and mutual benefit.
Three CEOS tell the president what to expect
CEOs from three giant companies appear to have played a role in getting the President to tone down his tariff talk.
The trio, from Walmart (WMT) , Target (TGT) , and Home Depot (HD) , “did not mince words” about what might occur if the tariff issues doesn’t get resolved, according to an Axios report.
The executives met with Trump Monday afternoon and told him warned him that his tariff and trade policy could disrupt supply chains, raise prices and empty shelves, according to sources familiar with the meeting.
While retail prices aren’t rising now, the trio said price increases will start to hit in perhaps two weeks.
Gold takes a breather
Gold hit $3,509 an ounce in early Tuesday trading and then fell back. The metal was falling again Wednesday, to $3,313 an ounce in New York, down $105.
The runup to $3,500 had all the characteristics of a bubble waiting to burst, and it did. Gold stocks were lower. Newmont NEM, one of the biggest U.S.-domiciled producers was down 2.3% to $53.27.
Crude oil, meanwhile, was down $1.57 a barrel to $62.12 a barrel in New York. Brent crude, traded in London, was down $2.50 to $64.94.
AAA’s national gas price was $3.171 a gallon on Wednesday, up from $3.166 on Tuesday.
Stock Market Today
Stocks soared at the open Wednesday for a second day in a row as investors cheered President Donald Trump’s comments that he hoped a trade deal with China could negotiated soon.
The rally retreated from frenzied levels when it became apparent a deal wasn’t remotely close and might take weeks or months — once the United States and China actually started to negotiate.
💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸
The question is who wants a deal more. A Chinese official in Beijing said, “The door to talks is wide open.”
At the same time, President Trump said he wouldn’t be firing Federal Reserve Chairman Jerome Powell (which might not be legally possible). That also cheered investors.
At 1:45 p.m. ET, the Dow was up about 39,667, up 480 points but down from a gain of nearly 1,200 points reached soon after the open. The Standard & Poor’s 500 Index was up 2% to 5,392. The Nasdaq Composite Index was up 3% to 16,792.
Related: Analysts reboot AMD stock price targets ahead of earnings
Tesla and Boeing shares rise
Tesla (TSLA) shares were higher after CEO Elon Musk said he would be reducing his time with the Trump Administration in the next month or so and and concentrate more efforts on the company. Shares of both companies were higher. Boeing was up 5.7% to $171.70. Tesla jumped 6.8% to $254.20.
Related: Former big tech CEO has shocking take on Nvidia
Tesla’s net income slid 71% in the first quarter, as the company struggled to overcome competitive pressures, especially overseas and a reputational hit from Musk’s polarizing role in the Trump administration.
On a more somber note, Bloomberg News reported that Intel (INTC) would be announcing job cuts of as much as 20% as the legendary chip maker tries to stabilize its business. The announcement was reportedly due when the company reported first-quarter profits.
More Wall Street Analysts:
Analyst unveils startling Nvidia stock forecast amid tariffsWall Street sounds alarm on Tesla, Elon Musk problemAnalysts see challenges for Apple over tariffs
Economy shows a little life
There was surprisingly decent news on the economy. Purchasing managers reports from Standard & Poor’s were showed the economy was still expanding in March.
Meanwhile, a report on new-home sales in March were stronger than expected. The report said home sales rose to a seasonally adjusted annual rate of 724,000 units. Sales were strongest by far in the South, which had been hit hard by bad weather in January and February.
But the cheer was offset by comments from Ryan Marshall, CEO of PulteGroup (PHM) , one of the nation’s biggest home builders. Starting in April, he said during the company’s earnings call Tuesday, “We have seen consumers at all price points impacted by changing macro conditions and any resulting decline in overall consumer confidence.”
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
