The Trump “put” is alive and well.
Markets rallied midweek after President Trump said he had “no intention” of firing Fed Chair Jerome Powell, easing investor concerns about the central bank’s independence following earlier threats to oust Powell over the Fed’s interest rate policy. Trump also softened his tone on tariffs, suggesting the steep duties on Chinese imports could eventually be reduced.
Read more: What Trump’s tariffs mean for the economy and your wallet
“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,” Michael Green, chief strategist and portfolio manager at Simplify Asset Management, told Yahoo Finance on Thursday.
At close: April 25 at 4:52:33 PM EDT
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Contrary to his role earlier this month when markets plunged on tariff news, Wall Street experts say Trump has stepped in as the perceived market stabilizer — a sign the White House could be paying closer attention to recent volatility, particularly in the bond and currency markets.
On Monday, investors dumped US stocks and traditional safe havens, with the 10-year yield spiking above 4.4% and the US dollar (DX-Y.NYB) sinking to its lowest level since 2022.
The unusual move, pulling back from both risk assets and volatility hedges, is seen as a rare dislocation, with strategists dubbing it the infamous “sell America” trade. However, those trends began to shift by Wednesday as the administration’s comments on Powell and tariffs helped restore investor confidence.
The numbers tell the story: On Friday, the 10-year yield had fallen below 4.3%, and the dollar moved closer to the key psychological level of 100.
Mark Newton, head of technical strategy at Fundstrat, told Yahoo Finance,”This week [was] a big boost to confidence.” He acknowledged that while markets may remain volatile and possibly retest their year-to-date lows, the sharp rebound is significant given the lack of formal trade agreements.
“Just knowing there’s a pivot in place and that the administration is willing to pull back is a positive,” he said.
Keith Lerner, co-chief investment officer and chief market strategist at Truist, added that Trump’s pivot indicates “some focus” on the market from the administration, but also warned the path forward for stocks could sour if incoming economic data begins to break down.
To that point, Michael Kantrowitz, chief investment strategist and head of portfolio strategy at Piper Sandler, said in a client update on Wednesday that 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.”
