Markets see gains after Trump says he won’t try to fire Fed chair

Stock markets on Wall Street and worldwide started the trading day on solid ground after Trump walked back comments about trying to fire Fed Chair Jerome Powell over interest rates

U.S. and international markets are starting the trading day with big gains, a clear sign of relief after President Donald Trump said he would not attempt to fire the head of the Federal Reserve.

The Dow Jones Industrial Average jumped nearly two per cent at the opening bell Wednesday, while S&P 500 and the Nasdaq each gained between two and a half and three per cent to start the day.

On Bay Street, the Toronto Stock Exchange was also strong out of the gate up by one per cent.

Trump, upset that the Federal Reserve was not cutting interest rates immediately, said that he could fire Fed Chair Jerome Powell. But Trump told reporters Tuesday, “I have no intention of firing him.”

Trump wants Powell and the Fed to resume cutting its benchmark borrowing rate to help boost the economy.

Powell and other Fed official have said they plan to remain cautious with interest rates amid the economic uncertainty caused by Trump’s tariffs and inflation that remains above the Fed’s two per cent target.

Most legal scholars agree that Trump can’t fire Powell from the Fed’s board of governors, and there is no legal precedent for doing so. However, there is less agreement over whether a president can remove him as chair.

Markets are also reacting to comments Tuesday from U.S. Treasury Secretary Scott Bessent. He said the ongoing tariffs showdown with China is unsustainable and he expects a “de-escalation” in the trade war.