Wall Street Extends Rebound as Trade War Fears Subside

Investors breathed a sigh of relief on April 24, 2025, as Wall Street extended its rebound amid signs of de-escalation in U.S.-China trade tensions and reassurance about Federal Reserve independence. The Dow Jones Industrial Average rose 400 points (1.1%), while the Nasdaq and S&P 500 surged 2.5% and 1.7%, respectively. But beneath the surface, markets remain caught in a tug-of-war between hope and lingering uncertainty.

The Catalyst: Trade Talk and Fed Stability

The rally was fueled by President Donald Trump’s clarification that final tariffs on Chinese goods would “come down substantially” from the proposed 145%—though he emphasized they “won’t be 0%.” This tempered fears of an economic collision course between the world’s two largest economies. Additionally, Trump’s assurance that he has “no intention” of firing Fed Chair Jerome Powell before his term ends in 2026 alleviated concerns about political interference in monetary policy.

Yet gains were tempered by Treasury Secretary Scott Bessent’s caution that the administration had made “no unilateral offer” to de-escalate. This underscored the fragile nature of the truce.

Tariff Escalations and the Path to De-Escalation

The trade war’s trajectory has been marked by dizzying swings. As of April 24, U.S. tariffs on Chinese goods stood at 104%, after Trump’s April 2 announcement of a 50% increase. China retaliated by raising its own tariffs to 125% and imposing export controls on rare earth materials critical to tech manufacturing.

While Trump’s recent rhetoric hinted at compromise, China remains defiant. Beijing has added 27 U.S. companies to its “Unreliable Entity List,” restricted imports of American agricultural products, and suspended visas for certain U.S. officials. Yet both sides face mounting pressure to avoid a full-blown economic rupture.

Sector Winners and Losers

The tech sector led the charge upward, with semiconductors and hardware stocks like Nvidia (NVDA) and Intel (INTC) surging 7% and 5%, respectively. Optimism around reduced trade barriers for semiconductor exports—vital to global supply chains—drove the gains.

Cryptocurrency also benefited from risk-on sentiment, with Bitcoin (BTC-USD) hitting a record $94,000. This fueled gains in crypto-exposed stocks like Coinbase (COIN) (+9%) and MicroStrategy (MSTR) (+7%).

Meanwhile, Tesla (TSLA) rose 5% despite missing Q1 earnings estimates. CEO Elon Musk’s pledge to spend more time at Tesla and reduce political involvement in the Trump administration’s trade rhetoric helped offset the disappointment.

The laggards were companies directly exposed to tariff pressures. Enphase Energy (ENPH) fell 12% after issuing weak guidance, while Intuitive Surgical (ISRG) dropped 6% due to warnings about margin compression from tariffs.

Global Markets and Commodities

Asia mirrored Wall Street’s cautious optimism. Hong Kong’s Hang Seng Index rose 2.37%, while Japan’s Nikkei 225 climbed 1.89%. In contrast, commodities reflected shifting risk appetites: WTI crude oil inched up 0.8%, while gold—a traditional safe haven—fell 2.1% as trade tensions eased.

Risks Ahead

Despite the rebound, risks loom large. The Fed’s next policy meeting could complicate matters if officials signal further rate hikes. Meanwhile, China’s export controls on rare earth elements threaten to disrupt industries from electric vehicles to aerospace.

Political volatility remains a wildcard. Trump’s Truth Social posts—such as labeling Powell a “major loser”—could reignite uncertainty. Investors also await clarity on whether the administration’s tariff reductions will materialize or prove fleeting.

Conclusion: A Fragile Truce, But Markets Bet on Compromise

Wall Street’s April 24 rebound underscores investors’ hope that the U.S.-China trade war’s worst days are behind us. The tech sector’s outperformance, Bitcoin’s surge, and reduced volatility in equity markets all signal a belief that cooler heads will prevail.

Yet the data paints a cautionary picture. Over the past month, the Dow has swung between gains and losses of over 9%, while the S&P 500 has seen its highest volatility since the 2020 pandemic crash. With tariffs still at record highs and diplomatic tensions unresolved, the path to lasting stability remains narrow.

For now, markets are pricing in a de-escalation scenario—but history shows that trade wars rarely end cleanly. Investors would be wise to stay nimble, monitor tariff implementation closely, and prepare for more volatility ahead.

The stakes are enormous: The global economy is already showing signs of strain, with China’s rare earth controls and U.S. de minimis tariff revocations disrupting supply chains. As one analyst noted, “This isn’t just a trade war—it’s a test of whether globalization can survive.” The outcome will shape markets for years to come.