Markets rise after Trump tariff statement; New home sales increase; Trade concerns hit restaurants

Financial markets breathed a sigh of relief Wednesday as President Donald Trump said currently high tariffs on goods imported from China would not stay that way forever. Trump also backed off on statements of the recent week indicating he wanted to fire Jerome Powell if the Federal Reserve chairman wouldn’t lower interest rates immediately.

The Dow Jones Industrial Average closed Wednesday up 419 points for a 1.1% gain. The S&P 500 gained 88 points or 1.7%, as the Nasdaq Composite increased 407 points for a 2.5% gain.

Trump said late Tuesday he had “no intention” to fire Powell, though he would like to see the Fed chair “a little more active in terms of his idea to lower interest rates.” Powell has said he is inclined to keep rates unchanged until there is more clarity on the effects of trade tariffs on U.S. inflation.

Several analysts warned earlier that attempts to remove Powell could cause further selloffs in financial markets that have been rocked during the past month by a series of tariff skirmishes between the U.S. and many of its biggest trade partners, including China, Canada and Mexico.

Trump Tuesday also said U.S. tariffs on goods from China, which recently reached 145%, will “come down substantially, but it won’t be zero.”

U.S. sales of new single-family homes during March increased 7.4% from the prior month and topped the year-earlier figure by 6%, providing some relief for an industry hit hard for the past several months by slowing sales and sluggish construction, spurred in part by elevated interest rates.

The Commerce Department and Department of Housing and Urban Development Wednesday said 724,000 homes were sold, based on seasonally adjusted annual figures. The government said 503,000 new houses remained up for sale at the end of March, up 0.6% from the prior month and rising 7.9% from March 2024. This represents a supply of 8.3 months of available inventory, increasing 6.7% from the prior month and rising 1.2% from a year earlier.

National Association of Realtors Chief Economist Lawrence Yun said a wider availability of new homes is helping new home sales advance, and builders’ focus on smaller-sized homes is attracting buyers. “Meanwhile, existing home sales have struggled the past two years due to historic low inventory levels,” Yun said in a statement, noting lower mortgage rates will still be needed over time to get potential buyers and sellers off the sidelines.

New-home buyers encountered more favorable pricing in addition to higher inventory in March. The government said the median price of new homes sold during the month was $403,600, down 1.9% from February and 7.5% below the March 2024 median price. 

Trade tariffs have begun to weigh on U.S. restaurant operators in the form of rising food and equipment costs, with other supply chain price hikes potentially on the way, according to the National Restaurant Association.

The Washington, D.C.-based trade group said some operators are also feeling the pinch from a drop in international visitors, spurred in part by tensions between the U.S. and many of its global trade partners now being hit with new tariffs on goods imported into America. Supply costs and foot traffic traditionally figure prominently in operators’ consideration of location expansions, restaurant upgrades and other projects.

“On the upside, a weaker dollar improves the purchasing power of foreign visitors, making the U.S. a more attractive destination,” the trade group said in a statement this week, noting the value of the U.S. dollar has recently declined relative to other currencies. “That could benefit restaurants in major tourist hubs.”

But the group noted that international travel “has moved in the wrong direction so far this year.” It cited International Trade Administration data showing 4.5 million foreign travelers arrived in the U.S. by air during March, down 9.7% from a year earlier.