Stocks recovered on Tuesday from a steep sell-off the day before, but investors around the world also rushed into gold, as concerns linger about President Trump’s trade war and his deepening anger at the Federal Reserve chair.
The S&P 500 rose more than 2 percent before paring back some of its gains, reversing its losses from Monday, when the index fell 2.4 percent. Monday’s sell-off had accelerated after Mr. Trump targeted Jerome H. Powell, the Fed chair, in a social media post, urging him to cut interest rates and suggesting that an economic slowdown would be Mr. Powell’s fault.
The stock market rally on Tuesday gained steam after Bloomberg reported that Treasury Secretary Scott Bessent said during a closed-door investor summit that he expected the tariff standoff with China to de-escalate.
Gold, which briefly rose above $3,500 an ounce on Tuesday for the first time, has set a series of records in recent weeks, during a largely ugly stretch for the markets. Investors often see gold as a safe haven during times of turmoil, and its price has surged more than 30 percent since the start of the year.
“Gold has again moved to yet another record, with its safe-haven reputation shining bright,” analysts at RBC Capital Markets said. “With the uncertainty related to Fed independence, gold continues to benefit as a safe-haven, and one not tied to the U.S. dollar.”
Gold has been soaring since early April when investors, alarmed by Mr. Trump’s tariffs, starting selling Treasury bonds.
Elsewhere in the markets:
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Major U.S. stock indexes rebounded, with all sectors gaining and the technology-heavy Nasdaq jumping about 2 percent.
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The dollar, which slumped on Monday against a range of currencies, was having another turbulent day, losing ground to the yen but recovering against the euro. The dollar has fallen against the British pound for 10 days in a row; an 11th on Tuesday would be the longest streak since at least 1971, according to Bloomberg.
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The yield on 10-year Treasury bonds fell slightly, to 4.39 percent.
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The Trump administration’s whiplash on trade policy continues to drive volatility in the markets and weigh on companies. “The level of uncertainty is too high — it’s not productive,” David Solomon, the chief executive of Goldman Sachs, said in a CNBC interview on Tuesday. “It’s affecting investment spending and planning, and that will have an effect on growth in the economy,” he added.
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In economic projections released on Tuesday, the International Monetary Fund said it expects slower growth and higher inflation in the United States as a result of Mr. Trump’s trade policies, which continue to drive sentiment on Wall Street.
Danielle Kaye is a business reporter and a 2024 David Carr Fellow, a program for journalists early in their careers.
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