US stocks moved higher on Wednesday as investors tracked developments in trade negotiations and awaited the Federal Reserve’s interest rate decision later in the day.
The Dow Jones Industrial Average rose 225 points, or 0.5%, while the S&P 500 added 0.4% and the Nasdaq Composite gained 0.3%.
Disney shares jumped over 10% following a stronger-than-expected earnings report and a surprise increase in streaming subscribers. In contrast, Uber shares fell roughly 6% after the company missed revenue expectations.
Markets were buoyed by news that Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet with Chinese officials in Switzerland this week, which was seen as a positive step following recent trade tensions triggered by President Trump’s tariff hikes.
Attention now turns to Fed Chair Jerome Powell’s post-meeting press conference, with investors looking for guidance on the path of interest rates.
US-China trade negotiations
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with Chinese officials in Switzerland this weekend to discuss trade and economic issues, their offices confirmed Tuesday evening.
Bessent told Fox News the focus would be on easing tensions rather than negotiating a comprehensive trade deal, stating, “My sense is that this will be about de-escalation, not about the big trade deal… But we’ve got to de-escalate, before we can move forward.”
Current US tariffs on Chinese imports stand at 145%, following Trump’s recent hike in response to retaliatory measures from Beijing.
The development followed President Trump’s comments during a meeting with Canadian Prime Minister Mark Carney, where he said, “we don’t have to sign deals” with other countries, “they have to sign deals with us.”
Eyes on the Fed meeting
The Federal Reserve is set to announce its interest rate decision on Wednesday afternoon.
The CME FedWatch Tool shows a 96.8% probability that rates will be held steady.
The meeting follows recent criticism of Powell from President Trump, who previously suggested his removal, though later clarified he had no intention of firing the Fed chief.
With no updates scheduled for the Fed’s economic projections or its dot plot at this meeting, investors will focus on the post-meeting statement and Chair Jerome Powell’s press conference for insight into the central bank’s policy outlook.
“The market is still pricing in more than three rate cuts this year, likely beginning in July,” said BofA economist Claudio Irigoyen.
However, he noted that given the Fed’s dual mandate, delaying cuts to focus on inflation control and maintaining policy credibility would be preferable—unless economic activity deteriorates significantly.
Concerns about inflation are intensifying as the US pursues more protectionist trade measures, including a 145% tariff on Chinese imports.
Stocks initially fell after President Trump’s April 2 tariff announcement but have since rebounded, helped by a 90-day pause on some of the higher duties.
“Stagflation seems to be the hardest word … But everything keeps pointing in that direction,” Irigoyen wrote, adding that elevated inflation combined with weakening growth could push the economy into a stagflationary phase.
That would further complicate the Fed’s policy decisions, making its approach increasingly dependent on how the data evolves.
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