European Stocks Rally as Trump's Fed Comments Soothe Markets

European stocks climbed after U.S. President Trump reassured investors by confirming no plans to fire Fed Chair Jerome Powell and hinting at reduced tariffs for China. This, combined with positive earnings reports, bolstered market sentiment across Asia and the U.S. despite ongoing trade tensions.

European stocks experienced a notable rebound on Wednesday after U.S. President Donald Trump confirmed he had no intention of dismissing Federal Reserve Chair Jerome Powell, simultaneously suggesting a potential reduction in tariffs for China. This move provided a sense of relief to investors, bolstering global stock markets.

The dollar initially surged following Trump's statements but later stabilized as European markets opened. While U.S.-China trade negotiations are yet to begin, Treasury Secretary Scott Bessent indicated a future de-escalation in tensions. Despite earlier market volatility, sentiment improved, reversing a short-lived 'sell America' trend.

In Europe, the STOXX 600 index rose by 1.7%, driven by encouraging earnings reports. Meanwhile, Asian markets surged, with MSCI's index up nearly 2%, and U.S. futures suggesting a Wall Street rally. Tesla shares increased, despite missed forecasts, as CEO Elon Musk announced a focus shift to his companies. The recovery in risk sentiment also influenced commodity prices, with oil gaining and gold prices declining.

(With inputs from agencies.)