Wall Street rallied for a second consecutive day on Wednesday, driven by signs of easing U.S.-China tensions and Trump’s assurance of not removing Federal Reserve Chair Jerome Powell.
The technology sector led the rally with the “Magnificent Seven” firms collectively adding $455 billion in market value. Roundhill Magnificent Seven ETF MAGS jumped 6.7% in the past couple of days while MicroSectors FANG+ ETN FNGS climbed 6.2%.
Roundhill Magnificent Seven ETF is the first-ever ETF that offers investors equal-weight exposure to the “Magnificent Seven” stocks. MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies.
Tesla (TSLA) led the charge on Wednesday, climbing more than 5% after CEO Elon Musk revealed that his involvement with the Trump administration would be “significantly” reduced. NVIDIA (NVDA), Meta (META) and Amazon (AMZN) each gained around 4%, while Apple (AAPL), Alphabet (GOOGL) and Microsoft (MSFT) posted gains in the 2% range (read: Should You Buy Tesla ETFs Post Q1 Earnings Miss?).
President Donald Trump indicated a potential reduction in the steep tariffs imposed on Chinese imports. At a White House press conference Tuesday, Trump called the current 145% reciprocal tariffs “too high” and said they would “come down substantially.”
Treasury Secretary Scott Bessent echoed the sentiment, stating that the tariff standoff with China is “unsustainable” and expressed confidence that a deal between the two nations could eventually be reached. A Wall Street Journal report further intensified the situation, revealing that U.S. officials are considering reducing tariffs on China to 50–65% but are depending on China to lower its trade barriers.
Trump, who criticized Powell by calling him a “major loser,” clarified that he had no plans to oust him before his term ends in May 2026.
A de-escalation of the trade war would likely benefit tech firms heavily reliant on Chinese manufacturing and consumer markets. Wedbush analyst Dan Ives noted that about 90% of Apple’s iPhones are manufactured in China, which accounted for 17% of the company’s revenues in 2024. Meanwhile, Tesla sources many of its parts and batteries from China and faces stiff competition from domestic automaker BYD. The easing of U.S.-China tension will benefit Tesla.
Amazon, too, has significant exposure. Roughly 30% of goods sold on the platform originate in China, and Chinese advertisers made up 14% of Amazon’s ad revenues in 2024, according to Raymond James. Chinese advertisers also accounted for 11% and 6% of total ad spending on Meta and Google, respectively. DA Davidson analyst Gil Luria estimated that China represents between 20% and 40% of NVIDIA’s end customers, though he cautioned on the exact figures due to the company’s revenue reporting structure.