U.S. Stocks May Extend Rally As Trump Softens Stance On Powell

(RTTNews) - After moving sharply higher over the course of the previous session, stocks are likely to show another strong move to the upside in early trading on Wednesday. The major index futures are currently pointing to an extended rally on Wall Street, with the S&P 500 futures up by 2.4 percent.

The upward momentum on Wall Street comes after President Donald Trump appeared to soften his stance on Federal Reserve Chair Jerome Powell.

"I have no intention of firing him," Trump told reporters on Tuesday but reiterated he would like to see Powell and the Fed resume lowering interest rates.

Trump's attack on Powell, including calling him a "major loser" as recently as Monday, had led to anxiety on Wall Street about the Fed's independence.

The president also suggested he's willing to take a less confrontational approach to trade talks with China, predicting the current 145 percent tariff on Chinese imports will "come down substantially."

The markets may also benefit from a positive reaction to earnings news from Tesla (TSLA), with the electric vehicle maker surging by 7.9 percent in pre-market trading.

The jump by Tesla comes after the company reported weaker than expected first quarter results but CEO Elon Musk said amount of time he spends with the Department of Government Efficiency will decline "significantly" beginning in May.

Not long after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of March. New home sales are expected to increase to an annual rate of 682,000 in March after jumping to a rate of 676,000 in February

Stocks moved sharply higher over the course of the trading day on Tuesday, regaining ground following the sell-off seen in the previous session. The major averages all showed significant moves to the upside, with the Dow and the Nasdaq closing higher for the first time in five days.

The major averages surged in morning trading and remained firmly positive throughout the afternoon. The Dow soared 1,016.57 points or 2.7 percent to 39,186.98, the Nasdaq spiked 429.52 points or 2.7 percent to 16,300.41 and the S&P 500 shot up 129.56 points or 2.5 percent to 5,287.76.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.9 percent, while Hong Kong's Hang Seng Index surged by 2.4 percent.

The major European markets have also shown strong moves to the upside on the day. While the German DAX Index is up by 2.2 percent, the French CAC 40 Index is up by 1.9 percent and the U.K.'s FTSE 100 Index is up by 1.1 percent.

In commodities trading, crude oil futures are slumping $0.88 to $62.79 a barrel after jumping $1.26 to $63.67 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,339.60, down $79.80 compared to the previous session's close of $3,419.40. On Tuesday, gold slipped $5.90.

On the currency front, the U.S. dollar is trading at 141.74 yen compared to the 141.57 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1410 compared to yesterday's $1.1421.