Europe midday: Stoxx powers ahead on Trump Powell U-turn
By Frank Prenesti
Date: Wednesday 23 Apr 2025
(Sharecast News) - European shares powered ahead on Wednesday, led by German software giant SAP, after President Donald Trump performed another U-turn and pulled back from his threat to fire Federal Reserve chair Jerome Powell while also hinting at possible lower tariffs for China.
The pan-regional Stoxx 600 index surged 1.72% to 516 points. Germany's DAX was up 2.77% and France's CAC-40 gained 2.28%.
Trump overnight said he had no plans to fire Jerome Powell only days after calling him a "major loser" for not cutting interest rates in response to the central banker's comments that the administration's tariff policies posed inflationary risks.
Markets also cheered comments from Treasury Secretary Scott Bessent, who called the current tariff situation "unsustainable".
Trump indicated that final tariffs on Chinese exports to the US "won't be anywhere near as high as 145%" but also warned they "won't be 0%".
Susannah Streeter, head of money and markets at Hargreaves Lansdown said the comments "have helped wash away some more pessimistic vibes".
"Worries about Trump wanting to meddle in monetary policy, following his comments about Powell appear to be ebbing away, after the president said he had no indication of removing him from office. US stocks look set to add to gains later with Wall Street set for a higher open."
"Financial markets are adjusting to Trump's modus operandi which is to speak and act impulsively and then retract some moves later. Just how much of the damage will linger remains to be seen and markets are likely to stay volatile as trade negotiations play out."
In equity news shares in SAP surged after the German software group swung to a first-quarter profit, with operating earnings up 60%.
Shares in Volvo fell as the Swedish vehicle manufacturer said first-quarter net sales fell 7% year on year, citing Trump's tariff policies. The news hit fellow automaker Saab.
Reporting by Frank Prenesti for Sharecast.com
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