A stock market surge on Wednesday was again fueled not by concrete evidence of policy changes, but by off-the-cuff comments from President Trump and other officials, as investors latched onto scraps of information about tariffs, trade and other crucial issues that can shift from day to day.
Wall Street’s drastic swings this week — a sharp sell-off on Monday, followed by two big daily rallies — highlight how investors are grasping for favorable news amid the confusion and uncertainty about the White House’s intentions.
Wednesday’s trading was no different. Stocks surged to start the day, before paring back gains after Treasury Secretary Scott Bessent dismissed speculation that Mr. Trump would unilaterally lower tariffs imposed on Chinese goods. The S&P 500, which rose as much as 3 percent in early trading, settled to a gain of about 2 percent, extending the rally from the day before, when the index jumped 2.5 percent.
The initial enthusiasm came from Mr. Trump’s remark on Tuesday that he had “no intention” of firing the Federal Reserve chair, Jerome H. Powell, which helped lift markets on Wednesday. Days before, Mr. Trump had lashed out at Mr. Powell — “If I want him out, he’ll be out of there real fast,” he told reporters — which unnerved investors who see the Fed’s independence as critical to the health of the U.S. economy.
The seesawing moves this week echoed the whiplash from earlier this month when Mr. Trump paused many of his “reciprocal” tariffs hours after they were imposed, turning a steep decline into a big gain.
Historically, many of the biggest single-day moves have occurred during down markets, said Steve Sosnick, the chief strategist at Interactive Brokers. Investors are always reluctant to miss out on a rally, he said.
“What is different about this current market environment,” Mr. Sosnick added, “is that it is so driven basically by one person’s decisions.”
A “huge” portion of the volatility, he said, “is strictly the result of policy decisions, and we’re seeing them being altered in real time.”
Despite this week’s rally, the S&P 500 sits about 10 percent below its level on Jan. 20, when Mr. Trump took office.
“This whole crisis has been man-made,” Mr. Sosnick said.
Some investors remained dour about the outlook, expecting slow progress on trade deals. Sharp moves lower in recent weeks, and mirroring sharp daily gains, have felt like repositioning and covering losing trades, more than a bullish reason for buying, said Michael Purves, chief investment officer at Tallbacken Capital Advisors. The moves, he said, were “classic bear market behavior,” and he said he expects the market will move lower.
“Trump threatening Powell one day and then backing off because the market sold off — that’s not coherent policy,” Mr. Purves added.
The effects of Wall Street being captive to the latest statements from the White House could be far-reaching, beyond the daily rises and falls. “The erratic threaten-retreat-threaten-retreat cycle has economic consequences,” Paul Donovan, the chief economist of UBS Global Wealth Management, wrote in a note. “The uncertainty this causes may impact consumer and business decision-making.”
Elsewhere in the markets:
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The technology-heavy Nasdaq Composite index rose nearly 3 percent. Amazon’s stock jumped about 5 percent, and Meta gained roughly 4 percent, moves worth hundreds of billions of dollars in market value, given the size of the tech giants.
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Shares of Tesla rose nearly 7 percent, even though the automaker reported a steep drop in profit the day before. Elon Musk, the company’s chief executive, said he would spend less time in Washington; his involvement in the Trump administration, competition from Chinese carmakers and a lack of new models has contributed to a slump in sales.
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Markets gained across much of Asia and Europe. Japan’s Nikkei 225 rose 1.9 percent; Hong Kong’s Hang Seng was up 2.5 percent; and in Germany, the DAX jumped 2.8 percent.
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The dollar regained some of its recent losses. An index of the dollar against a basket of major currencies rose 0.7 percent.
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The price of 10-year Treasury bonds rose strongly, a sign that investors were more willing to buy U.S. debt. The yield, which moves inversely to price, dropped to 4.37 percent.
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Gold, which hit a record $3,500 an ounce on Tuesday, eased back. It fell to around $3,300 on Wednesday, down more than 3 percent for the day.
