US stocks rally as Trump signals thaw in trade war, Tesla shares soar
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(NEW YORK) — U.S. stocks rallied in early trading on Wednesday, one day after President Donald Trump said tariffs on China would “come down substantially.”
Trump also appeared to soften previous attacks on the Federal Reserve, saying late Tuesday he has “no intention” of firing top central banker Jerome Powell.
The Dow Jones Industrial Average jumped 625 points, or 1.6%, while the S&P 500 climbed 2.5%. The tech-heavy Nasdaq increased 3.4%.
Shares of electric carmaker Tesla surged 6.5% in the first trading since CEO Elon Musk said his time devoted to the Department of Government Efficiency would “drop significantly” next month, paving the way for his return to the company. Still, Tesla shares have fallen by nearly half since a December peak.
Musk described his work at DOGE as necessary, but he said that “working for the government to get the financial house in order is mostly done.”
The uptick also took hold at the other so-called “Magnificent Seven” tech giants, which drove much of the gains in the S&P 500 over recent years.
Facebook parent Meta climbed 5%, while chipmaker Nvidia also increased 5%.
Earlier this month, Trump hiked tariffs on Chinese goods to a total of 145%, prompting China to respond with 125% levies on U.S. products.
The tit-for-tat measures escalated a trade war between the world’s two largest economies, but the White House this week appeared to signal a desire to ease the tensions.
Treasury Secretary Scott Bessent reportedly told a group of investors on Tuesday that “over the very near future, there will be a de-escalation” of the trade war with China. Bloomberg News first reported the remarks.
Bessent’s comments, which came at a private JPMorgan event, sent stocks climbing on Tuesday afternoon. Trump echoed the sentiment hours later.
“145% is very high and it won’t be that high,” Trump told reporters at the White House late Tuesday. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”
This is a developing story. Please check back for updates.
The owner of Texas Cafe in Rio Grande City, Texas, Becky Garza, speaks with ABC News’ Mireya Villareal in December 2024. (Mireya Villareal)
(RIO GRANDE CITY, TEXAS) — Emily Williams Knight, president and CEO of the Texas Restaurant Association, represents 58,000 restaurants that employ 1.5 million Texans. That breaks down to 11% of the state’s workforce that could potentially be impacted by the 25% tariffs on Mexican imports that just went into effect.
All Tuesday morning she was on calls and in meetings, calming fears because people believe Texas will feel the brunt of this first — And, after that, the domino effect will be fast.
“Exhausted and afraid: Those are the words I keep hearing from people,” Williams Knight said. “They’re running out of levers to pull here, and they’re afraid. If this is a sustained tariff policy — what that will mean to their business long term? The unpredictability comes with a tremendous cost.”
One of those concerned businesses is Texas Cafe in Rio Grande City, which has been serving South Texas for more than 85 years and was recently certified as a historical landmark by the State of Texas. People travel from all over the country to try their signature dish, Envueltos: A special chile-con-carne filling rolled up in a tortilla. But don’t call it an enchilada or the owner, Becky Garza, will scold you profusely.
“These are my grandfather’s recipes that he invented back in 1939,” she said. “And when you change something, people notice. Especially Hispanic people.”
Garza is getting ready for Cuaresma, or 40 days of Lent. It is essential that she gets very specific ingredients from Mexico for this time of year or her customers will know something isn’t right. Plain and simple: Her business, livelihood and family legacy depend on imports from Mexico that play an essential role in the food she serves. And now, she said, all of that is going to cost more because of the new tariffs.
“I can buy stuff from Mexico cheap and use it in my home. But I can’t use any of those products from Mexico in my business unless I buy them from a store that follows FDA guidelines. I buy Mexican cokes. I get cinnamon sticks. These are a very high-price now and sometimes hard to find. I get pilonsios. Chile guajillo for menudo. And avocados from Mexico are better — the real avocados from Mexico that you can only find in small stores. But boy, they are expensive, and it’s only going to get worse,” Garza explained, adding: “I will not stop getting these items from Mexico, because I don’t want to change the consistency or the quality.”
Garza has seen prices steadily increasing over the last few years. In 2024, she spent around $1,000 for her specialty Cuaresma items. But in 2025, she spent $1,200 — a 20% increase that may not seem like a lot to big retail chains, but is huge for small business owners like Garza.
Knight wholeheartedly agrees, saying, “In the last four years we’ve seen a 35% increase in the cost of food needed in these restaurants and a 36% increase in labor. That’s not even including the big swipe fees businesses are paying, plus the increases to rent and utilities.”
Over the last 30 days, TRA has worked closely with the National Restaurant Association on a strategy to help mitigate the uncertainty. They’ve suggested restaurants review their menus and supply chain, looking for ways to source things closer to their businesses. They’ve also encouraged businesses to keep pushing the value of their service and products. And, before these tariffs went into effect, they reached out to lawmakers to educate them on the impact and push for exemptions.
“It feels like we are in this very unknown space again,” Williams Knight said.
Small, independent businesses make up 70% of the restaurants in Texas.
So, while both big and small establishments will be impacted, Williams Knight said she worries that this will create a ripple effect that could drive some families to close up shop.
She said that some of their restaurants are already starting to get emails from suppliers about costs going up, and she compared the feeling to a few days after the COVID-19 pandemic shutdown was announced, explaining: “You’re going to see a very large number of closures and then a large number of people unemployed.”
For years, as prices have gone up, Garza has found a way to cut back and save so she doesn’t have to charge customers more. In fact, she’s been working a second, primary job that sustains her own day-to-day needs, opting not to take a real paycheck from Texas Cafe. But she’s retiring in June and having to think about her future. And for the first time since she’s taken over the restaurant, Garza made the tough decision on Tuesday to raise prices.
“I had a meeting with my waitress and we’re going up on the breakfast menu due to the high price of eggs,” Garza explained. “I save money and I am frugal. But right now it’s been getting difficult.”
Not wanting to manifest any other difficulties the restaurant may face in the future, she said that’s all she’s willing to do and talk about for now.
However, there are indicators that the tariff policies that went into effect Tuesday may not affect small businesses as extremely as some are predicting, or their customers, for too long.
President Donald Trump’s administration could announce a pathway for tariff relief on Mexican and Canadian goods covered by the North America Free Trade Agreement as soon as Wednesday, according to an interview with Commerce Secretary Howard Lutnick on Fox Business on Tuesday.
ABC News’ Zunaira Zaki contributed to this report.
(NEW YORK) — As Tesla stock has fallen in recent weeks, members of the board and an executive at Elon Musk’s company have been selling off millions of dollars in stock, according to filings with the U.S. Securities and Exchange Commission.
Together, four top officers at the company have offloaded over $100 million in shares since early February.
Last week, longtime Musk ally James Murdoch — the estranged son of Fox boss Rupert Murdoch and a board member since 2017 — became the latest to do so, exercising a stock option and selling shares worth approximately $13 million, according to an SEC filing. The sale took place on March 10, coinciding with the stock’s largest single-day decline in five years.
According to one filing, the shares were sold “to cover the exercise price relating to the exercise of stock options to purchase 531,787 shares, which are scheduled to expire in 2025.”
Elon Musk’s brother, Kimbal Musk, who also sits on the board, unloaded 75,000 shares worth approximately $27 million last month, according to a filing.
The chairman of the board, Robyn Denholm, has offloaded more than $75 million dollars worth of shares in two transactions in the past five weeks, federal filings show. The selloffs made by Denholm came as part of a predetermined sales plan.
A number of board members and executives made similar moves in November and December. But the recent sales come at a tumultuous time for Tesla, with the stock falling nearly 50% from a peak in mid-December. The company’s shares have suffered most of those losses since President Donald Trump took office and Musk began his controversial governmental cost-cutting efforts as the head of the newly created Department of Government Efficiency.
“Whenever insiders, including directors, are selling shares, it’s not a positive signal,” Jay Ritter, a professor of finance at the University of Florida, told ABC News.
However, Ritter added, an exception applies to the predetermined sales plan adopted by Denholm in July 2024, which marks a routine effort to avoid the perception an officer unloaded shares based on inside information.
“Filing a plan months ago to sell some of those shares over time is common,” Ritter said.
Tesla did not immediately respond to ABC News’ request for comment.
Seth Goldstein, an analyst at research firm Morningstar who studies the electric vehicle industry, said some of the stock sales may owe to personal financial choices made by individual officers.
“While a sale doesn’t necessarily mean an executive or board member feels negatively about a company’s outlook, it could mean they think the stock is at a fair price or even overvalued,” Goldstein said.
The share selloffs made by board members and executives totaled about $118 million, but the transactions often came after the individuals exercised stock options, the costs of which totaled about $16 million. The officers ended up with a profit of just over $100 million.
ABC News previously reported on concerns from shareholders and pension funds, some of whom have called on Musk to turn his attention back from slashing government spending to running his car company.
Tesla Chief Financial officer Vaibhav Taneja also sold off shares totaling more than $5 million over recent weeks. Some of those transactions came as part of predetermined sales plans, but a transaction earlier this month did not stem from a scheduled sale.
(NEW YORK) — As the world reels from tariffs instituted by the Trump administration, stock markets are widely in decline.
On Friday, U.S. stock saw the worst decline since the COVID-19 pandemic began in 2020. But the declines last week did not rank among the worst crashes in the history of the U.S. stock markets.
President Donald Trump said Sunday, “I don’t want anything to go down, but sometimes you have to take medicine to fix something and we have such a horrible — we have been treated so badly by other countries because we had stupid leadership that allowed this to happen.”
Here are the worst declines in the history of the Dow Jones Industrial Average by percentage:
5.) March 12, 2020 (-2,352.60, -9.99%)
Four days before the worst COVID-related drop in stocks, the Dow slid 9.99%. Blue chip stocks also dropped 7.79% — the 14th-worst all-time — on March 9, the first day of the COVID-induced drops.
4.) Oct. 29, 1929 (-30.57, -11.73%)
The stock market crash of October 1929 signaled the end of the “Roaring Twenties” and the beginning of the Great Depression. This was the second day of the big drop, known as “Black Tuesday,” which began one day earlier and occupies the next spot on this list.
3.) Oct. 28, 1929 (-38.33, -12.82%)
The first Black Monday in the history of the Dow Jones, investors’ fortunes were wiped out in a major wake-up call for people who thought the the good times would last forever.
2.) March 16, 2020 (-2,997.10, -12.93%)
Many Americans can recall the crash that happened as the world was shutting down over the COVID-19 pandemic. The worldwide shutdowns and disruptions to the global supply chain caused investors to bail.
1.) Oct. 19, 1987 (-508, -22.61%)
Black Monday, or the first contemporary global financial crisis according to the Federal Reserve, followed seven months of explosive growth on Wall Street. Stocks had climbed 44% over those months, according to the Fed, before the U.S. announced a larger-than-expected trade deficit. After moderate losses in the week before, the global markets tanked and Monday opened to panic from U.S. investors as well.
Note: The Dow Jones officially considers Dec. 12, 1914, the worst day in trading history, but economists agree 1987’s Black Monday was the worst. The stock market closed in July 1914 due to the start of World War I, and wouldn’t open again until Dec. 12, 1914. Even then, it was on a limited basis, with the official return to full trading on April 1, 1915. Technically, the Dow actually went up on Dec. 12, 1914, but a retroactive correction makes it look like it went down.
