Entertainment and tech shares followed markets higher extending a rally sparked by President Trump floating a possible détente in the China trade war and insisting he has no plan “whatsoever” to fire Jerome Powell after recently musing about the central bank chief’s “termination.”
Warner Bros. Discovery and Roku have gained 9% Wednesday, both up 9% leading volatile media shares, which, in many cases are outpacing broader markets. The S&P 500 is up by 3%, the Nasdaq by 4% and the Dow Joes Industrial Average up 2.6% having added over 1,000 points in morning trade. Amazon and Meta are up, respectively, 7% and 6%. TKO Group gained 5%, Disney and Live Nation 4% but showbiz stocks are up across the board in the midst of earnings season with Imax (up 2%) reporting this afternoon and Comcast (up 2%) tomorrow morning.
The swing is the latest gyration in a wild period with markets plunging time and again in response to tariffs on global trading partners and threats to U.S. financial stability, then surging on comments by President Trump or his advisors signaling a softer stance. On Tuesday, Trump said the tariff on Chinese imports of “145% is too high, it will come down substantially” and that he was “optimistic” on trade negotiations. That followed remarks by Treasury Secretary Scott Bessent that the trade war with China was unsustainable, kicking off a market rally.
China has taken a hard line against Trump and raised its duties on imports of U.S. goods to 125% and other countries are weighing their own responses to Trump’s tariffs. The uncertainty is brutal for businesses across sectors.
Trump advisor, scaling-back DOGE chief and Tesla CEO Elon Musk said China tariffs hit the automaker, disrupting the availability of magnets needed for its Optimus household robots. Musk said after dismal Tesla earnings that he’s against tariffs and for free trade and has told Trump so, but the decision is the president’s.
Even-keeled Federal Reserve chief Jerome Powell said last week that tariffs would slow growth and raise prices. He said the Fed, which has a mandate to keep price inflation under control, won’t lower interest rates until it has a clearer sense of the tariff impact. That prompted a furious response from Trump, who said, Powell’s “termination cannot come fast enough,” massively spooking markets, which plunged on Monday.
Yesterday, in response to a question in an Oval Office briefing, the president said, “I have no intention” firing Powell. “I would like to see him be a little more active in terms of his idea to lower interest rates. It’s a perfect time to lower interest rates. If he doesn’t, is it the end? No, it’s not. But it would be good timing. It could have taken place earlier.”
