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Good morning and welcome back to FirstFT. Markets are in a more positive mood today — we’ll explain why. Here’s what else we’re covering:
Putin’s peace offer
Lutnick’s son in crypto venture
Musk steps back from Doge
Crackdown on US science
Maga Catholics seek “Trump-like” pope
Markets surged overnight after Donald Trump said he had “no intention” of firing Jay Powell, pulling back from a historic confrontation with the US Federal Reserve chair.
What did Trump say? The president reiterated his recent complaints that the Fed needed to cut borrowing costs but added: “I don’t want to talk about that because I have no intention of firing him [Powell].” Trump’s sustained criticism of Powell in recent days had rattled global markets and threatened the independence of the Fed, which helps underpin investors’ confidence in the global financial system.
How have markets reacted to the comments? Futures tracking the S&P 500 were up 2.5 per cent and those for the tech-heavy Nasdaq climbed 2.7 per cent ahead of the start of trading on Wall Street. In Europe, the Stoxx Europe 600 is up 1.8 per cent and in Asia Japan’s Topix closed 2.1 per cent higher. The dollar index gained 0.3 per cent, extending its rebound from a three-year low, while US government bonds rallied, with the yield on the 10-year Treasury note falling 0.04 percentage points to 4.35 per cent. Gold dropped 2 per cent after hitting a record high of $3,500 per troy ounce yesterday.
What this means: Investors said the president’s pledge not to dismiss Powell proved there were some members of his inner circle who recognised that markets valued the independence of America’s major institutions. “This shows there are some guardrails around this president,” said Dec Mullarkey, managing director at fund manager SLC Management. Powell has repeatedly said he would serve his full term as Fed chair and believed his early dismissal would not be allowed under US law. Follow the latest market reaction to Trump’s comments.
Join Unhedged’s Robert Armstrong and other FT experts at 8am ET for a webinar covering Trump’s trade policies how they have reshaped markets. Register for free.
Here’s what else we’re keeping tabs on today:
World Bank-IMF Spring meeting: The event continues in Washington with the release of the Fiscal Monitor Report on global public finances and comes a day after the organisation cut its global growth forecast.
Ukraine: A planned ministerial meeting in London to discuss the future of Ukraine has been downgraded after US Secretary of State Marco Rubio withdrew. It comes after the FT reported that Russian President Vladimir Putin offered to halt his invasion at the current front line.
Companies: Boeing, IBM and Philip Morris International are among the companies reporting results today. Goldman Sachs holds its annual shareholder meeting.
Pope Francis: The late pontiff’s body will be moved to St Peter’s Basilica today to allow Catholics to pay their final respects ahead of Saturday’s funeral. Here’s more on the funeral plans.
Five more top stories
1. Scott Bessent yesterday warned that the US-China trade war was “not sustainable” and that the two countries would have to de-escalate their dispute in the “very near future”. But the US Treasury secretary admitted trade negotiations with China would be “a slog”. He was speaking at a private conference hosted by JPMorgan. Here’s more on the comments which helped lift market sentiment around the world.
2. Elon Musk said he would refocus his attention on Tesla and “significantly” scale back his US government role after the billionaire’s carmaker reported its lowest quarterly profits since the end of 2020. Tesla shares, which have fallen by nearly two-fifths since the start of the year, roared back in after-market trading.
3. Howard Lutnick’s son is partnering with SoftBank, Tether and Bitfinex to capitalise on a crypto revival under Trump. Brandon Lutnick, who took over as Cantor Fitzgerald’s chair after his father became US commerce secretary, is creating a multibillion-dollar bitcoin vehicle that will absorb billions in cryptocurrency from the other partners.
4. Grant Thornton US is in talks to buy more than half a dozen of its sister firms in Europe and the Middle East in a private equity-driven acquisition spree that will dramatically reshape the accounting firm’s global network. Stephen Foley in New York has more details.
5. Former OpenAI employees and leading artificial intelligence experts are joining forces to oppose the ChatGPT maker’s transition to a for-profit company. In a joint letter submitted to the California and Delaware attorneys-general last night, the group opposed the move while echoing the concerns of Elon Musk. Read more on the letter.
Today’s big read
The Trump administration has embarked on a wide-ranging campaign to shrink publicly funded US science, slashing finance for leading organisations and suppressing research on subjects including gender inequalities, vaccines and climate change. Critics say the cuts, fuelled by cost-cutting and ideological missions, threaten to undermine the innovation that has powered America’s economic success. But after a slow start resistance is gathering, report Michael Peel and Hannah Kuchler.
We’re also reading . . .
Vance’s audition to be Trump’s heir: The many contradictions of the vice-president should not distract from his ambition, writes Edward Luce.
Peronist Pope: Outsiders might be surprised to learn that Francis was markedly less popular in his native Argentina than other Latin American Catholic strongholds, writes Michael Stott.
Tradwives: Domestic influencers have become pin-ups of the religious right’s quest for higher birth rates, writes Chine McDonald of think-tank Theos.
Chip tariffs: Levies on components of foreign-made semiconductors would function as a major tax increase on electronics sold in the US, writes Chris Miller.
Chart of the day
It is the job of the IMF to make sense of what Trump’s unnecessary shock might mean for the world economy, writes Martin Wolf. But the fund, like everyone else, has no idea what the US president will do next, an uncertainty that is itself economically paralysing.
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Take a break from the news
What does the future of beer look like? HTSI drinks columnist Alice Lascelles visited the new Heineken Studio in Amsterdam for a taste of innovations including flavoured foams and a “personalised draught system”.
