Gold plummets as the dollar rebounds, the market experiences a "180-degree reversal," what happened overnight?

Under the impetus of multiple positive news, the U.S. stock market achieved an astonishing rebound.

On Tuesday, Secretary of Commerce Gina Raimondo expressed optimism about trade prospects in a closed-door meeting, and Trump stated that he would not fire Powell, alleviating market concerns and reigniting risk appetite for assets. Meanwhile, there were reports that the U.S., Japan, and India are nearing a "framework agreement," but the actual situation may be more prolonged and complex, which temporarily caused a pullback in U.S. stock gains.

Overnight, the U.S. stock market achieved its largest rebound since April 9. The Dow Jones Industrial Average rose by more than 1,000 points, while the S&P 500 and Nasdaq Composite Index reached their highest levels of the day, nearly erasing all losses from the previous day.

As global tensions eased somewhat, the dollar rebounded to refresh its daily high, while both the yen and euro came under pressure; gold fell below $3,400 from a record high of $3,500.

Raimondo's Closed-Door Meeting Conveys Optimism

According to media reports, U.S. Treasury Secretary Gina Raimondo stated on April 22 at a closed-door investor meeting that the tariff deadlock is unsustainable and that trade conditions are expected to ease in the near future.

This news briefly triggered a surge in U.S. stocks, with the Dow soaring over 1,000 points, and the dollar also jumped in response.

At the same time, some analysts pointed out that, in the absence of concrete evidence, Raimondo's remarks seemed more like a means to soothe the market rather than a genuine shift.

U.S., Japan, and India "Close" to Reaching a Framework Agreement, but Just "Pie in the Sky"?

According to media reports, the White House is finalizing a "framework agreement" with Japan and India to avoid the implementation of large-scale tariffs. U.S. Vice President Kamala Harris also hinted at this approach during her speech in India, stating that the U.S. and India "are working hard to reach a trade agreement" and noted that she and Indian Prime Minister Modi "made very good progress" in their meeting on Monday.

However, reports indicate that these agreements are likely just broad "frameworks" or "memos" for future agreements, and it may still take months to reach a final trade agreement, which caused U.S. stocks to briefly give back gains driven by Raimondo.

The reports pointed out that this is the clearest signal so far that the White House recognizes they need to take more measures to convince businesses and financial markets that this trade war, which has shaken the global economy and could cause greater shocks in the coming months, is coming to an end.

A source close to the White House admitted to the media:

"I wouldn't even call them agreements. Basically, it's an agreement that indicates our willingness to discuss reaching an agreement." In addition, informed sources indicate that a temporary framework like that of the U.S. and Japan cannot resolve the most challenging issues in the trade relationship between the two countries, and there is still a possibility that a final agreement may not be reached.

Media analysis points out that the White House hopes to alleviate market concerns about tariff policies in this way, seeking some "political breathing room." Whether this "painting a pie in the sky" strategy can truly stabilize the market remains to be seen.

Wendy Cutler, former negotiator for the Office of the United States Trade Representative and Vice President of the Asia Society Policy Institute in Washington, commented:

“If the president believes we have significant leverage on these tariff issues, why not take some time to really think through our demands on these countries? This way, we can reach meaningful agreements that will be lasting and will maintain trade and investment relations for years to come, rather than one-off agreements of a transactional nature.”

Trump says he will not fire Powell, easing market concerns

According to media reports, Trump stated on Tuesday that although he remains dissatisfied with the Federal Reserve's failure to cut interest rates more quickly, he has no intention of firing Powell.

When asked if he confirmed that he was not seeking to remove Powell from his position, Trump replied in the Oval Office: “Absolutely not, never.”

“This is the media spreading rumors. No, I have no intention of firing him. I just wish he would be more proactive about cutting rates.”

“Would it be the end of the world if he doesn’t? No. But now is indeed the right time. In any case, I have no intention of firing him.”

Analysts believe that this statement aims to calm market tensions and marks a significant shift in Trump's attitude. Previously, he had intensified his criticism of Powell and had at one point refused to rule out the possibility of taking unprecedented measures to remove him, causing market turbulence.

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