The Trump “put” is alive and well — at least for now.
Markets surged midweek after President Donald Trump signaled a major pivot in tone, saying he had “no intention” of firing Federal Reserve Chair Jerome Powell and softening his rhetoric on tariffs against China. The result: a boost in market confidence and a notable recovery across equities and bonds.
A Swing in Market Sentiment
“We are seeing that every time positive news comes out on trade, the markets will react positively because they know that’s what needs to be resolved,” said Michael Green, chief strategist at Simplify Asset Management, in an interview with Yahoo Finance.
Earlier this month, Trump’s aggressive trade stance and threats against Powell had rattled investors, triggering a sharp sell-off in stocks, bonds, and the dollar. However, by this past Wednesday, Trump’s tempered language marked a perceived stabilization, calming fears of escalating economic volatility.
Key Market Moves:
- The Dow Jones Industrial Average (DJI) gained modestly to 40,113.
- The S&P 500 (GSPC) and Nasdaq Composite (IXIC) also posted solid gains.
- The 10-year Treasury yield eased back below 4.3%, after surging past 4.4% earlier in the week.
- The US Dollar Index (DX-Y.NYB) rebounded closer to the psychological threshold of 100.
On Monday, investors were caught off guard by an unusual simultaneous sell-off in both stocks and traditional safe havens — a rare event dubbed the “sell America” trade by strategists. But by midweek, optimism returned as the administration’s new tone provided a psychological cushion for battered markets.
Experts Weigh In
Mark Newton, head of technical strategy at Fundstrat, noted:
“This week [was] a big boost to confidence.”
While acknowledging that markets may stay volatile and could still retest year-to-date lows, Newton emphasized the importance of the pivot itself — suggesting that even without formal trade agreements, the perception of flexibility from the White House is significant.
Similarly, Keith Lerner, co-chief investment officer at Truist, remarked:
“Trump’s pivot indicates some focus on the market from the administration,”
but warned that the path forward for stocks depends heavily on upcoming economic data. Should the data weaken significantly, optimism could quickly erode.
Meanwhile, Michael Kantrowitz, chief investment strategist at Piper Sandler, offered cautious optimism in a note to clients:
“While a lot of uncertainty remains, markets are priced for incremental changes in the outlook, and I see this as another positive change that markets can find relief.”
Looking Ahead
With no major trade deal yet finalized and plenty of economic headwinds still looming, the durability of this rally remains uncertain. But for now, the Trump pivot has offered investors much-needed breathing room, reinforcing that sometimes, perception — and a carefully timed softening of tone — can be just as powerful as actual policy shifts.
