Asian markets jump on Trump and Bessent comments but recession fears linger

Asian stock markets climbed on Wednesday after the latest updates from Washington suggested the long tariff dispute with China might cool, easing worries that have haunted investors for months.

Japan’s Nikkei 225 advanced 1.9% to close at 34,868.63. Australia’s S&P/ASX 200 rose 1.3% to 7,920.50. South Korea’s Kospi gained 1.6% to 2,525.56 as reported by APNews. Hong Kong’s Hang Seng improved 2.4% to 222,072.62, while mainland China’s Shanghai Composite slipped 0.1% to 3,296.36.

Softer rhetoric brings relief to markets

Markets had been unsettled by earlier talk that Powell’s job was at risk after the Fed paused its run of cuts to short-term interest rates.

Relief flowed from President Donald Trump’s comments Tuesday, when he told reporters, “I have no intention of firing him,” referring to Federal Reserve Chair Jerome Powell.

Treasury Secretary Scott Bessent added to the market ease. In an investor meeting on Tuesday, he called the current tariff stand-off with Beijing “unsustainable” and predicted a “de-escalation” of the trade fight.

Analysts said those words, together with Trump’s softer line, helped lift demand for riskier assets across the region.

Europe followed Asia higher. France’s CAC 40 jumped 2.1% to 7,480.99 and Germany’s DAX climbed 2.5% to 21,820.14 in early dealings. London’s FTSE 100 was up 1.6% at 8,461.24. Futures pointed to a firmer start on Wall Street, with Dow futures ahead 1.5% at 39,960.00 and S&P 500 futures up 2.0% at 5,421.75.

“Market direction will more likely than not continue to be dictated by Trump’s latest whims regarding tariffs and trade,” said Tim Waterer, chief market analyst at KCM Trade.

IMF cuts forecast, Tesla’s profits drop, oil climbs, and the Fed stays put

Even with Wednesday’s rally, strategists warned that swings could persist. Many on Wall Street say the outlook for growth hinges on how quickly Washington can strike agreements that roll back import duties. Without progress, several expect the economy to tip into recession.

The International Monetary Fund underlined that concern on Tuesday, cutting its 2025 global growth forecast to 2.8% from the 3.3% predicted earlier this year.

Corporate news offered a mixed picture. A batch of stronger-than-expected earnings from large U.S. companies helped support recent gains, yet electric-vehicle maker Tesla stunned investors late Tuesday with a sharp profit drop.

Quarterly earnings fell to $409 million from $1.39 billion, far below analyst estimates. Chief Executive Elon Musk said he will devote less time to Washington and more to running Tesla after weeks of public protests over factory cost-cutting and vandalism aimed at the brand.

In commodity trading, benchmark U.S. crude rose 80 cents to $64.47 a barrel, while Brent added 81 cents to $68.25.

Currency moves were modest. The dollar slipped to 141.87 Japanese yen from 142.37 yen. The euro ticked up to $1.1390 from $1.1379.

Analysts now believe the Fed will leave rates unchanged at its early-May meeting, saying price pressures have eased but remain above target. Most think a cut is unlikely before late summer.

By late afternoon in Tokyo, traders were watching for further statements from the White House on tariffs, aware that sentiment could shift quickly if negotiations stall.