Wall Street Soars on Trade Hopes and Fed Reassurances

U.S. stock index futures surged on President Trump stepping back from threats to fire Federal Reserve Chair Jerome Powell and expressing optimism on a trade deal with China. Tesla's shares jumped after strong earnings, and megacap tech stocks rose despite fines in Europe. Positive sentiment lifted the markets.

In a dramatic turn of events, U.S. stock index futures rallied on Wednesday after President Donald Trump eased his stance on firing Federal Reserve Chair Jerome Powell, while also raising prospects for a resolution in the trade dispute with China.

Corporate earnings played a pivotal role, with Tesla shares surging 7.2% in premarket trade. The automaker surpassed expectations for its core business, and CEO Elon Musk announced a reduced role in Trump's administration to concentrate on his business ventures. Trump's backpedal on Powell drew a favorable market reaction, boosting assets that previously faced downward pressure amidst criticism of Powell's leadership.

Hopes for U.S.-China negotiations further buoyed investor sentiment, as Trump suggested a trade deal could notably lower tariffs on Chinese imports. This shift in presidential rhetoric 'set the stage' for an equity rally, according to Spectrum Wealth Management's Leslie Thompson. Megacap tech stocks saw gains, and major companies posted better-than-expected earnings, igniting positive movement in the indexes.

(With inputs from agencies.)