By Caroline Valetkevitch
NEW YORK (Reuters) -U.S. stocks climbed more than 2% on Tuesday after the previous day’s selloff, while the dollar edged higher even as investors continued to assess U.S. President Donald Trump’s criticism of the Federal Reserve chair.
U.S. Treasury long-term yields declined after moving higher on Monday.
Investors also were looking closely at first-quarter reports from U.S. companies. Shares of industrial conglomerate 3M Co were up 8% after the company beat first-quarter profit expectations, while it noted a likely hit to 2025 profit from tariffs.
Bloomberg reported that U.S. Treasury Secretary Scott Bessent had said a tariff standoff with China was unsustainable, and that he expects the situation to de-escalate.
Trump stepped up his criticism of Fed Chair Jerome Powell for not cutting interest rates, calling him a “major loser” in a social media post on Monday, which raised concerns about the president’s influence over the central bank and added to concerns about U.S. economic stability.
Investors worry the White House could try to replace Powell with someone who would cut rates.
Trump said last week he believes Powell will leave his job if Trump asks him to do so, although Powell himself has said he would not. It is unclear whether Trump has the authority to fire Powell, though lawsuits over unrelated firings by Trump are being watched as possible proxies.
In stocks, “overall, the trend is down, but it’s not a fire sale, get rid of everything. People are looking for opportunity and pockets of value, which are there,” said Oliver Pursche, senior vice president, adviser for Wealthspire Advisors in Westport, Connecticut.
“All of the soft (economic) data points are weakening but the hard data continues to be robust. That’s one of the things that investors are grappling with,” he said.
Investor confidence has already been shaken by Trump’s back-and-forth announcements on tariffs, which investors worry could create severe disruption in world trade and hurt the economy.
The International Monetary Fund on Tuesday slashed its forecasts for growth in the United States, China and most countries, citing the impact of U.S. tariffs now at 100-year highs.
The Dow Jones Industrial Average rose 882.96 points, or 2.32%, to 39,053.37, the S&P 500 rose 118.58 points, or 2.30%, to 5,279.14 and the Nasdaq Composite rose 425.76 points, or 2.68%, to 16,296.66.
Shares of Tesla, due to report quarterly results after the closing bell, were up 5.8%. Other mega-cap names were up sharply as well, including Apple, which gained 3.6%.
Shares of Coinbase Global were up 8.3% as bitcoin extended recent gains. Bitcoin was last up 4.07% at $90,887.19.
MSCI’s gauge of stocks across the globe rose 11.73 points, or 1.50%, to 794.84. The pan-European STOXX 600 index ended up 0.25%.
The dollar recovered a bit, but was still close to multiyear lows versus the euro and the Swiss franc.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.49% to 98.83, with the euro down 0.68% at $1.1435.
Against the Japanese yen, the dollar strengthened 0.28% to 141.24. The yen earlier notched a seven-month high against the dollar.
Against the safe-haven Swiss franc, the dollar strengthened 1.01% to 0.817.
Analysts said the dollar was still in a fragile state, however, amid concerns over the U.S. administration’s tariffs.
Recent weakness in the dollar, along with demand for safe-havens, helped gold hit another all-time high of $3,500.05 earlier in the day. Spot gold was last down 0.83% at $3,396.43 an ounce.
Oil was higher as new U.S. sanctions against Iran and rising stock markets helped spark a recovery. U.S. crude rose 2.85% to $64.88 a barrel and Brent rose to $67.77 per barrel, up 2.28% on the day.
The yield on benchmark U.S. 10-year notes fell 1.4 basis points to 4.391%, from 4.405% late on Monday.
(Reporting by Caroline Valetkevitch in New York; Additional reporting by Elizabeth Howcroft in Paris and Wayne Cole in Sydney, Editing by Sharon Singleton, Kirsten Donovan and Matthew Lewis)
