By Connor Smith | Wednesday, April 23

Risk On. The stock market's rally continued today as Wall Street piled into riskier stocks amid hopes that the U.S. will dial back its tariffs on China.

The S&P 500 rose 1.7%. The Nasdaq Composite jumped 2.5%. The Dow Jones Industrial Average gained 1.1%.

Comments from President Donald Trump after the close yesterday that tariffs on China "won't be anywhere" near 145% when the two sides negotiate a deal sent stocks rising early this morning. He also suggested he wouldn't fire Federal Reserve Chairman Jerome Powell, which sent bonds rallying.

"We’re going to be very nice,” Trump said. “Ultimately they have to make a deal.”

The momentum picked up when The Wall Street Journal reported that the Trump administration was considering a move to bring down tariffs by more than half on some goods to lower the temperature on trade tensions.

Of course, tariff chatter isn't worth much without action. 

“I can understand the reaction by the markets which are on pins and needles and on constant alert for the next comment, press conference or social media snippet out of the White House,” writes Rosenberg Research's David Rosenberg. “But all that the President has done is to make volatility great again.”

Sure enough, after peaking around 10:30 a.m., the S&P 500 lost ground for much of the rest of the day. 

The market may have more to chew on in the weeks ahead, as earnings season heats up, offering real numbers on how companies are holding up.

DJIA: +1.07% to 39,606.57
S&P 500: +1.67% to 5,375.86
Nasdaq: +2.50% to 16,708.05

The Hot Stock: Amphenol +8.2%
The Biggest Loser: Enphase Energy -15.7%

Best Sector: Technology +2.9%
Worst Sector: Consumer Staples -0.6%

Musk's DOGE Departure

Tesla stock rallied more than 5% today despite the company reporting weak results last night. A big reason why is CEO Elon Musk's new plan to spend less time in Washington, D.C. My Barron's colleague Allen Root explains:

CEO Musk told investors that starting in May, his "time allocation to DOGE will drop significantly."

Investors wanted to hear that Musk is engaged at Tesla and managing through tariffs, the trade war with China, and increased competition—no matter how much time he spends in Washington, D.C.

Hearing that Musk will step back from his duties is cheering Wall Street. Weak vehicle sales in the first quarter fueled fears that the CEO's duties in the Trump administration were turning away core buyers: politically left-leaning drivers who are looking to go green.

That's great news for Tesla investors who felt neglected amid Musk's role in the Trump administration, but what does it mean for the so-called Department of Government Efficiency?

Barron's Joe Light writes that DOGE without Musk will have less power, but the project's narrative is too important to the Trump administration's legislative agenda to disappear completely.

Losing Musk would be a big blow to DOGE, whose team has tried to cut tens of thousands of federal employees through buyouts, deferred resignations, layoffs, and the attempted dismantling of agencies such as U.S. Agency for International Development. The allure of working with Musk was a major reason some DOGE employees signed up in the first place.

Musk’s status as the world’s richest man with direct access to Trump also allowed him to drive cuts even over the objections of cabinet secretaries. Some federal judges had pushed back on DOGE’s cuts, describing them as probably illegal.

Without Musk at the helm, DOGE’s mission could move over to Russell Vought, director of the Office of Management and Budget, said Raymond James policy analyst Ed Mills.

On the flip side, Mills argues job cuts could be easier under Vought, if he opts for a more methodical approach than Musk.

You can read more on DOGE from Joe here.