The bounce in U.S. stocks gained momentum on Wednesday as the Trump administration turned down the heat on its trade war with China that has so rattled markets, while the president distanced himself from his own calls for the immediate termination of Federal Reserve chair Jerome Powell.

Wall Street strategists still think stocks will recover by the end of 2025 — just not as dramatically as they had once predicted.

Major U.S. stock indexes rallied and the dollar stabilized, as investors welcomed comments from the White House on tariff negotiations.