Market Recap: Wall Street Rallies on Tariff Hopes, Futures Dip Ahead of Tech Earnings

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Index Update

U.S. markets rallied on Wednesday, with the Dow up 1.07%, the S&P 500 gaining 1.67%, and the Nasdaq surging 2.5%, boosted by President Trump's remarks suggesting Chinese tariffs may be lowered and reaffirming support for Fed Chair Powell. However, gains were trimmed after Treasury Secretary Bessent clarified that no unilateral tariff cuts were planned and trade talks with China had not yet started. In corporate news, IBM shares fell nearly 7% in after-hours trading after the company reaffirmed its full-year guidance, falling short of investor expectations for an upgrade.

Market Movers

On Wednesday, the top gainers were  Pegasystems Inc. (+26.98%), followed by Cantor Equity Partners, Inc (+23.35%). On the contrary  Enphase Energy, Inc (-11.57%) and Seres Therapeutics, Inc (-6.74%) declined the most the same day.

Commodities Update

Crude oil prices steadied after a sharp drop, as investors weighed potential increases in OPEC+ output against evolving trade dynamics. Both WTI and Brent crude hovered near $63 and $66.5 per barrel, respectively. Some OPEC+ members may push for accelerated production hikes, while Kazakhstan has signaled it won’t reduce output due to domestic priorities. US-China trade negotiations offered some support to prices, with talk of possible tariff reductions, though US officials emphasized no unilateral actions would be taken. At the same time, progress in US-Iran talks could lift oil supply, but new US sanctions on Iran's energy sector pose challenges.

Gold prices rebounded after a brief pullback, rising to around $3,320 per ounce amid ongoing US-China trade uncertainty. Investors turned to gold as a safe-haven asset, driven by doubts over trade policy stability and a broader shift away from US assets. Treasury Secretary Bessent highlighted the need to reduce tariffs for trade progress, while President Trump indicated selective tariff relief for carmakers. Gold has gained over 30% this year, with the gold-to-silver ratio hitting its highest level in decades outside the pandemic period.

Macro Update

The U.S. 10-year Treasury yield held steady around 4.36% as investors weighed mixed signals on U.S.-China trade policy. While the Trump administration is reportedly considering tariff reductions, Treasury Secretary Bessent clarified that no formal talks have started and no unilateral cuts are planned. Meanwhile, President Trump's reassurance that Fed Chair Powell will remain in his position helped calm fears over political interference in monetary policy, providing some stability to bond markets.

Futures Update

U.S. stock index futures declined, pulling back after two consecutive days of gains as investors awaited earnings from tech giant Alphabet. Dow Jones Futures, S&P 500 Futures, and Nasdaq 100 Futures all saw notable drops. Previously, Wall Street had rallied, supported by optimism over possible tariff reductions on China and a softer stance from President Trump regarding the Federal Reserve.

After a significant upward movement early in the session, stocks trimmed their gains throughout Wednesday's trading but still finished with solid increases. All major indices closed sharply higher, with the S&P 500 gaining 88.08 points, or 1.67%, to end at 5,375.85. From a technical standpoint, the index faced selling pressure due to a descending trendline resistance zone, as illustrated in the chart. This indicates the potential for consolidation before any clear directional trend emerges in the near future. Additionally, the 14-period Relative Strength Index (RSI) is hovering around the midpoint, suggesting that sideways momentum could be seen shortly. The primary support level is set at 5,207, while resistance is noted at 5,492.