Dow Jones soars close to 500 points as Trump calms Powell firing fears, China tariff relief eyed

• DJIA jumps 1.8% to trade above 39,800 after Trump says Powell won't be removed.
• The Wall Street Journal reports the US is weighing tariff cuts on China to ease tensions.
• Treasury's Bessent confirms no unilateral offer, but both sides see the need for mutual relief.
• Apple, Nvidia surge 3% and 5% as US-China sentiment improves.

The Dow Jones Industrial Average (DJIA) rallied over 490 points or close to 1.30% on Wednesday amid traders' relief on a possible de-escalation of the US-China trade war and US President Donald Trump's comment that he doesn't plan to remove Federal Reserve (Fed) Chair Jerome Powell. At the time of writing, the DJIA remains above 39,800 after hitting a daily low of 39,544.

De-escalation hopes in US-China trade war spark tech rally; Apple and Nvidia lead gains, Gold tumbles despite falling yields

On Tuesday, Trump said that tariffs on China would be less than 145% but threatened that "it'll come down substantially, but it won't be zero." A story in The Wall Street Journal that Washington is considering reducing tariffs on China to ease tensions between the latter and the US improved traders' risk appetite.

US Treasury Secretary Scott Bessent added, "No unilateral offer from Trump to cut China tariffs," adding that the trade war needs to be de-escalated for discussions to proceed.

Shares of US companies exposed to China jumped, led by Apple (APPL) and Nvidia (NVDA), by 3% and 5% respectively. Meanwhile, market sentiment trumped Gold's rally so far, with the yellow metal diving over 2.75% down at $3,286 even though US Treasury yields are also falling, with the 10-year T-note coupon down three basis points to 4.364%.

Dow Jones price forecast

The DJIA's downtrend is intact, though. After hitting a daily high of 40,336, the index seems poised to close the 'gap up' sponsored by Trump's comments on Tuesday. This means the Dow could fall and challenge the April 22 high, which turned support at 39,271, before trying to rally toward the 40,000 mark, which was briefly tested before Bessent's remarks.

Conversely, bears need to drag the index below 39,000 for a bearish continuation, which would open the door for lower prices. The next support would be 38,500, followed by 38,000, ahead of testing the year-to-date (YTD) low of 36,614, which was hit on April 7.