Asian stocks rise: Asian stocks, dollar rise as Trump walks back on Fed

US equity-index futures soared and a gauge of the dollar’s strength rose for a second day in a broad lift for American assets. Asian shares advanced at the open while gold retreated. Shares of Tesla Inc. rose in after hours as Chief Executive Officer Elon Musk said he will step back “significantly” from the Department of Government Efficiency.

Trump’s comments on the Fed chief late Tuesday in Washington walk back opinions expressed earlier in the week that sparked concerns about the US central bank’s independence. Progress in various trade talks also helped improve market sentiment after investors had broadly retreated from US assets this month following the announcement of century-high levies.

“While it is still early days, the mood in the market is evidently shifting,” wrote Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. “What was a strong ‘sell America’ vibe flowing through markets yesterday has in part reversed.”

US stocks surged Tuesday and the action was largely driven by trade war headlines as investors look for clues on how to trade the crisis. White House Press Secretary Karoline Leavitt said that progress is being made on trade deals and that the “ball is moving in the right direction with China.” The comments followed a Politico report that the White House is nearing general agreements with Japan and India on trade.

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Stocks were also supported by Bloomberg’s report of closed-door comments by Treasury Secretary Scott Bessent saying the tariff standoff with China is unsustainable and that he expects the situation to de-escalate. The US president also said on Tuesday that final tariffs on China wouldn’t be “anywhere near” the 145% level he’s set.The US said it’s made “significant progress” toward a bilateral trade deal following talks between Vice President JD Vance and Indian Prime Minister Narendra Modi. Vance on Tuesday called on India to buy more American goods, particularly energy and military equipment.“We are looking at more successful trade negotiations with key trading allies. I put Europe, India, Japan, South Korea, Australia in that category,” Stuart Kaiser, head of equity trading strategy at Citigroup Inc., said on Bloomberg Television on Tuesday. “I think we will see good progress there and that is good for markets.”

At the same time, the International Monetary Fund sharply lowered its forecasts for world growth this year and next, along with a warning that the outlook could worsen because of the trade war.

The unease around US assets that sparked a selloff in long-term government bonds and sent yields soaring is showing up in the options market, where premiums to protect against even bigger losses are at their highest since the “flash crash” of 2021.

“We are in a period of extreme uncertainty, where one should not react too much to daily moves,” Anwiti Bahuguna, Northern Trust Asset Management’s CIO of global asset allocation, said on Bloomberg Television on Tuesday.

Havens suffered on Tuesday as gold retreated from a record high, with the metal continuing its decline early Wednesday. Short-dated Treasuries sold off as investors showed lackluster demand for an auction.

Bitcoin advanced above $90,000 for the first time since early March, fueling optimism that the biggest digital token is finally breaking free of a longstanding tendency to move in the same direction as US tech stocks.