U.S. stock markets were up on Thursday morning as President Donald Trump moderated his tone on some key issues that have been spooking investors.
The broad S&P 500 index was up 1.2% Thursday morning while the Dow Jones Industrial Average was up 0.6%. The Nasdaq composite, an index heavy on tech companies, was up 1.68%.
The higher openings follow earlier gains on Tuesday and Wednesday. Trump spoke this week on both China and the Federal Reserve in a fashion that seemed to reassure investors.
Markets have fallen sharply since Trump’s inauguration amid the host of policy changes the administration has been attempting, including tariffs on nations across the globe.
Sharp declines from market peaks to corrections, when stocks drop 10% from a recent high point, tend to be relatively short, said Sam Stovall, chief investment strategist at CFRA Research, according to CNN.
But history doesn’t always repeat itself, he noted. And there is plenty of economic uncertainty at the moment.
“The only problem is that this is what I call a manufactured correction, meaning that it started because Trump initiated a trade war,” he said, according to CNN. “It is because of what the current administration is doing.”
It’s difficult to pinpoint a market bottom in the midst of a slump, according to CNN. Patience and planning critical for investors in turbulent times, said Yusuf Abugideiri, a certified financial planner and chief investment officer at Yeske Buie, according to CNN.
“The patient, disciplined, policy-based investor ultimately is going to be rewarded over the long run,” Abugideiri said, according to CNN. “That’s the way the market makes you work for the returns. You’ve got to be patient; you’ve got to be disciplined.”
Investors reacted favorably after Trump said he had “no intention” of firing Federal Reserve Chairman Jerome Powell, according to NPR. Trump had previously called for Powell’s “termination” and called the chairman a “loser.”
Markets slumped after those earlier comments, which were seen as an attack on the Fed’s independence from political influence. That independence is seen as a key aspect of the U.S. financial system.
Although Trump backed away from his harshest comments on Powell, he said he still might call him and push him to cut rates, according to Axios.
“I might call him. I haven’t called him, but I believe he’s making a mistake by not lowering interest rates,” Trump said in Oval Office remarks to reporters, according to Axios. “He will hopefully do the right thing. The right thing is to lower interest rates.”
Interest rate cuts by the Fed are generally seen as a boost to the economy and are often viewed favorably by investors. But the Fed has shown no signs it’s planning rate cuts.
Economists agree that Trump’s tariffs are likely to raise prices for consumers. Powell has said the Fed is planning no changes until it’s clear how Trump’s policies are affecting the economy, according to CNN.
Trump has also been speaking in gentler tones about his trade war. He said on Tuesday he’s willing to “substantially” cut current tariffs on China, which total 145%, according to Bloomberg.
“We’re going to have a fair deal with China,” Trump told reporters on Wednesday, according to Bloomberg.
And Treasury Secretary Scott Bessent said there’s an opportunity for a “big deal” with China.
“If they want to rebalance, let’s do it together,” Bessent said, according to Bloomberg.
Trump’s handling of the economy have pushed his poll numbers on the topic to an all-time low.
Contact Kevin Tampone anytime: Email | Twitter | Facebook | 315-282-8598
