Global stock markets and the dollar have rallied on hopes of two significant climbdowns by the Trump administration on issues blamed for a slump in values.
Remarks by the US Treasury secretary on punitive tariffs against China lifted the mood on Wall Street initially before the president himself moved to calm market trade war worries and also end speculation he could fire the head of the country’s central bank.
The Dow Jones Industrial Average and tech-focused Nasdaq Composite both ended Tuesday trading 2.7% up, erasing losses of the previous day.
Asian markets later followed that lead, with the Hang Seng in Hong Kong gaining 2.4%.
European indices also saw a strong opening, with the FTSE 100 up by more than 1.2%. It was led higher by Asia-focused banks HSBC and Standard Chartered.
US futures suggested Wall Street would pick up where it left off, with further strong gains expected.
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The US dollar – badly hit by trade war implications in recent weeks – was at least a cent higher than a day earlier against many rival currencies including the pound.
The rally gathered steam on Tuesday evening when US Treasury secretary Scott Bessent told a private JPMorgan event that he expected a “de-escalation” in the spiralling spat with China.
It’s a fight that has seen US tariffs hit 145% and China responding with duties of 125%.
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1:07
Trump: Tariffs are making US ‘rich’
According to a transcript obtained by the Associated Press news agency, he told the audience: “Neither side thinks the status quo is sustainable”, but he added that peace talks were yet to start in earnest and could take time to bear fruit.
His boss later struck a similar tone in remarks to reporters when he said the final tariff rate with China would come down “substantially” from the current 145%.
“It won’t be that high, not going to be that high,” Mr Trump said, adding: “We’re doing fine with China… we’re going to live together very happily and ideally work together.”
He gave no hint that he plans to ease wider tariffs on trading partners, including the UK which is currently subject to 25% tariffs on car, steel and aluminium imports and a wider 10% “baseline” tariff.
But the president did row back on an apparent threat, made last week, to sack the chair of the Federal Reserve Jerome Powell in revenge for the US central bank holding off on interest rate cuts that could provide some stimulus to the tariff-hit economy.
Mr Powell has said the Trump administration’s protectionist policies have created uncertainty over growth and the threat of higher inflation.
The president has dismissed those arguments but told reporters: “I have no intention of firing him”.
Image: Federal Reserve chair Jerome Powell was nominated for the role by Donald Trump in 2017. File pic: AP
His comments were widely seen as an attempt to calm financial market concerns that the independence of the country’s central bank was under threat.
Analysts cautioned there was a long way to go to recover values seen before the start of the trade war, with the Nasdaq remaining almost 16% down in the year to date alone.
US government borrowing costs also remain elevated.
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1:10
What IMF said about the UK economy
Not helping sentiment were big downgrades to global growth forecasts by the International Monetary Fund on Tuesday.
Michael Brown, senior research strategist at Pepperstone, said of the investor mood: “Participants understandably remain jittery, not only as the haven value of both Treasuries and the USD (US dollar) continue to be called into question, but also as a huge degree of trade uncertainty continues to linger.
“As a reminder, the whole concept of ’90 deals in 90 days’ is currently running at ‘0 deals in 14 days’ which, to be frank, doesn’t quite have the same ring to it.”
Donald Trump has said he will cancel all executive orders that he claims were signed with an autopen by his predecessor Joe Biden.
The US president alleged Mr Biden was “not involved” in signing the orders and claimed “the radical left lunatics circling Biden around the beautiful Resolute Desk in the Oval Office took the presidency away from him”. He did not provide any evidence for his claims.
An autopen is a device which reproduces a person’s signature, allowing them to repeatedly sign documents without having to do so by hand each time.
In a post on his Truth Social platform, he said: “Any document signed by Sleepy Joe Biden with the Autopen, which was approximately 92% of them, is hereby terminated, and of no further force or effect.
“The Autopen is not allowed to be used if approval is not specifically given by the President of the United States.”
He added: “I am hereby cancelling all Executive Orders, and anything else that was not directly signed by Crooked Joe Biden, because the people who operated the Autopen did so illegally.
“Joe Biden was not involved in the Autopen process and, if he says he was, he will be brought up on charges of perjury.”
Mr Trump has repeatedly claimed Mr Biden was not mentally capable by the end of his term and his staff made decisions on his behalf, using an autopen to sign them off without his knowledge.
Mr Trump has not provided any evidence for his claims, while Mr Biden and his former aides have denied they made decisions on his behalf.
In June, Mr Biden said: “Let me be clear: I made the decisions during my presidency.
“I made the decisions about the pardons, executive orders, legislation, and proclamations. Any suggestion that I didn’t is ridiculous and false.”
Mr Trump has also used an autopen, but claimed he only used it “for very unimportant papers”.
Image: Pic: Reuters
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0:31
Trump trolls Biden with new ‘presidential portrait’
Earlier this year, Mr Trump replaced a portrait of Mr Biden in the Oval Office with a picture of an autopen signing the former president’s name.
The suspect in the shooting of two National Guard members in Washington DC is facing a first-degree murder charge.
It follows the death of one of the soldiers, 20-year-old Sarah Beckstrom.
The other soldier, Andrew Wolfe, 24, was taken to hospital in critical condition after the incident on Wednesday afternoon. On Friday, West Virginia’s governor said Wolfe remained in a “very critical condition”.
Image: Andrew Wolfe and Sarah Beckstrom. Pic: Reuters
US attorney Jeanine Pirro’s office said the suspect, 29-year-old Rahmanullah Lakanwal, now faces charges including one count of first-degree murder, three counts of possession of a firearm during a crime of violence and two counts of assault with intent to kill while armed.
Pirro said there are “many charges to come” beyond the upgraded murder charge and that Lakanwal had driven across the country to launch an “ambush-style” attack with a revolver.
She said her heart went out to the family of Beckstrom, who volunteered to serve and “ended up being shot ambush-style on the cold streets of Washington DC by an individual who will now be charged with murder in the first degree”.
President Donald Trump called Beckstrom, part of the West Virginia guard, a “highly respected” and “magnificent person”.
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Investigators are continuing to execute warrants in the state of Washington, where the suspect lived, and other parts of the country, Pirro said.
However, she declined to discuss the suspect’s motive, saying officials have been working around the clock on that question.
Officials said Lakanwal entered the US in 2021 through Operation Allies Welcome, a Biden administration programme that evacuated and resettled tens of thousands of Afghans after the US’s chaotic withdrawal from the country.
Kristina Widman, who claims to be Lakanwal’s former landlord, said he had been living in Bellingham, close to Seattle, with his wife and five children.
The #AfghanEvac charity said Lakanwal applied for asylum during the Biden administration, but his asylum was approved under the Trump administration.
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2:44
Trump has called for every Afghan national who entered the US under Biden to be investigated following the shooting of two National Guard troops.
On Wednesday night, Trump called for the reinvestigation of all Afghan refugees who had entered under the Biden administration.
The director of US Citizenship and Immigration Services, Joseph Edlow, said in a statement that the agency would take additional steps to screen people from 19 “high-risk” countries “to the maximum degree possible”.
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The President has since said he wants to “permanently pause migration” from poorer nations and is promising to seek to expel millions of immigrants from the US by revoking their legal status.
Organisations that work with refugees are worried that those who fled dangerous situations to start again in America will face a backlash after the shooting.
The US will review green cards issued to the citizens of 19 countries after two members of the National Guard were shot by a suspected Afghan gunman in Washington DC.
Joseph Edlow, director of US Citizenship and Immigration Services (USCIS), revealed the order from President Trump.
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He wrote on X, formerly Twitter: “At the direction of @POTUS, I have directed a full scale, rigorous re-examination of every Green Card for every alien from every country of concern.”
Asked which countries would be affected, USCIS pointed to a presidential proclamation from June listing 19 countries.
The proclamation sought to “fully restrict” arrivals from Afghanistan, Burma, Chad, the Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen.
It also “partially” restricted arrivals from Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela.
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Image: Rahmanullah Lakanwal.
Pic: Reuters
Afghan national Rahmanullah Lakanwal, 29, has been named as the suspected gunman in this week’s shooting and has been detained.
He worked as part of a CIA-backed unit in Afghanistan, and reportedly came to the States under a programme meant to help Afghans who’d risked their lives assisting US troops in Afghanistan.
He’s thought to have driven thousands of miles to the capital from his home in Washington state, where he lives with his wife and five children.
Attorney general Pam Bondi called him “a lone gunman” who “opened fire without provocation, ambush style”.
Image: Gunfire in Washington DC sees two National Guard members shot
President Trump described him as a “savage monster”.
He was granted asylum in April this year, according to NBC News.
One of his victims, 20-year-old Sarah Beckstrom, died of her wounds, while the other, Andrew Wolfe, 24, remains in a critical condition.
Image: The two National Guard members who were shot in Washington D.C. as 20-year-old Sarah Beckstrom and 24-year-old Andrew Wolfe. Pic: Reuters
Pic: Reuters
Lakanwal reportedly came to the US under Operation Allies Welcome, a programme enacted by former President Joe Biden after he pulled American forces out of Afghanistan in 2021.
Edlow explictly targeted the previous president as he announced the new green card regime.
He wrote on X: “The protection of this country and of the American people remains paramount, and the American people will not bear the cost of the prior administration’s reckless resettlement policies.”
Speaking after the attack, President Trump was even more caustic.
He said: “The suspect in custody is a foreigner, who entered our country from Afghanistan, a hellhole on Earth.
“He was flown in by the Biden administration in September 2021 on those infamous flights that everybody was talking about.
“His status was extended under legislation signed by President Biden – a disastrous president, the worst in the history of our country.”
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He continued: “This attack underscores the greatest national security threat facing our nation.
“The last administration let in 20 million unknown and unvetted foreigners from all over the world, from places that you don’t even want to know about.
“No country can tolerate such a risk to our very survival.”