U.S. stock index futures jumped sharply Tuesday evening after President Trump backtracked on his most aggressive rhetoric toward Federal Reserve Chair Jerome Powell and hinted at a less hawkish stance on China tariffs. The moves lifted S&P 500, Nasdaq 100, and Dow Jones futures by 1.7-2.2%, setting markets up for a potential follow-through rally.

Fed Independence Reassurance

• No Firing Powell: Trump clarified he does not intend to remove Jerome Powell, easing fears over central bank independence.

• Rate-Cut Pressure Eased: While still urging lower rates, the President's toned-down criticism reduced the risk premium on Fed policy uncertainty.

China Tariffs Poised to Ease

• “Doing Fine With China”: Trump said U.S. trade relations are healthy and that existing 145% tariffs on China would be cut “substantially” (but not eliminated).

• Bessent's Backing: Treasury Secretary Scott Bessent had earlier labeled the trade war “unsustainable”, reinforcing hopes for de-escalation.

Futures & Market Reaction

• S&P 500 Futures: +2.0% to 5,422.0

• Nasdaq 100 Futures: +2.2% to 18,795.0

• Dow Jones Futures: +1.7% to 40,012.0

• Wall Street Close:

  • S&P 500: +2.5% to 5,287.75

  • Nasdaq Composite: +2.7% to 16,300.42

  • Dow Jones Industrial: +2.7% to 39,186.98

Tesla Shines in After-Hours

• TSLA +5.1%: Shares surged after Elon Musk pledged to scale back Dogecoin and government duties, refocusing on Tesla's core EV business.

• Q1 Miss Overshadowed: Despite underwhelming revenue and profit, investors rewarded the renewed commitment to operations.

What to Watch Next

1. Economic Data: Flash PMIs (Wed) for an early look at trade-war impacts on activity.

2. Fed Speeches: Any pushback from Fed officials will test the durability of Tuesday's relief rally.

3. Trade Negotiations: Watch for concrete steps toward tariff rollbacks, which could extend gains in risk assets.

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