US Stocks Surge On Political Softening—Is Crypto Next In Line To Rally?

In a sharp reversal of recent market sentiment, U.S. equities posted robust gains across all major indexes on Wednesday, April 23, after President Donald Trump unexpectedly cooled his stance on two major fronts: his feud with Federal Reserve Chair Jerome Powell and ongoing U.S.-China tariff tensions. 

Investors, already reeling from weeks of macroeconomic headwinds, embraced the shift in tone as a bullish signal—and now the crypto world is watching closely.

Crypto: Wall Street Breathes Easy on Fed Clarity

Markets had been teetering on uncertainty as Trump launched fiery rhetoric against Powell just days earlier, with speculation mounting over a potential ouster. 

However, Trump’s Oval Office comments Tuesday—denying any real intent to fire Powell—quickly defused fears of institutional instability.

“I never did,” Trump said regarding Powell’s potential removal, though he doubled down on his desire for rate cuts.

This clarification delivered immediate relief to investors who had been bracing for another round of monetary chaos. 

The S&P 500 rallied 2.2%, the Dow Jones surged over 620 points (1.6%), and the Nasdaq Composite soared 3.3%, led by tech optimism and earnings strength.

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Crypto: Tariff Talk Turns Tame—Sort Of

Another market-moving headline was Trump’s surprising suggestion that U.S. tariffs on Chinese imports could be slashed “substantially.” 

While Treasury Secretary Scott Bessent dismissed the idea and insisted both nations need to cut tariffs mutually before formal negotiations, the perception of easing trade tensions was enough to power stocks upward.

The messaging mismatch between Trump and Bessent hardly dampened enthusiasm. Wall Street instead focused on the shift in tone—from confrontation to potential compromise, even if tentative.

Tech-Led Rally Ignites Optimism

High-profile names led the charge: Tesla jumped 7.6%, rebounding from a lukewarm earnings report after CEO Elon Musk declared he would “significantly” scale back time spent on meme coin DOGE. 

The pivot away from crypto distractions seemed to reassure institutional investors.

Meanwhile, Nvidia, Meta, and Amazon each rose over 5%, buoyed by strong tech sentiment and renewed appetite for risk assets in light of diminishing macro headwinds.

Also read: Could TRUMP Be More Bullish? Analyzing Futures Data and On-Chain Movement

The Crypto Angle: Could Relief Spill Over?

While the crypto market hasn’t yet mirrored Wall Street’s upswing, the improved macro backdrop could set the stage for a follow-through rally, especially for assets like Bitcoin and Ethereum, which had shown signs of decoupling from traditional markets amid recent geopolitical volatility.

In particular, Bitcoin’s role as a hedge against uncertainty may soften temporarily as investors rotate back into equities on positive political cues. 

However, if Fed rate cuts return to the conversation and dollar weakness continues, crypto could experience a secondary lift—particularly as ETF inflows and institutional exposure remain strong.

Moreover, with U.S.-China trade tensions seemingly de-escalating, capital markets may find room to breathe, allowing speculative assets like cryptocurrencies to re-enter risk-on territory.

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Conclusion

Wednesday’s rally on Wall Street wasn’t just a knee-jerk reaction—it was a relief rally rooted in political recalibration. 

As Trump steps back from inflammatory positions and hints at economic reconciliation, markets are recalibrating accordingly. 

For crypto, the takeaway is clear: if macro calm persists, risk appetite will expand, and digital assets may once again ride the wave.

The next 72 hours will be telling. If crypto follows equities upward, expect bullish narratives to intensify heading into the next rate policy update and Q2 earnings season.

FAQ

1. What triggered the sudden rally in U.S. stock markets on April 23?

The surge was largely driven by a political tone shift from Donald Trump, who walked back threats against Fed Chair Jerome Powell and unexpectedly hinted at reducing U.S.-China tariffs. This softened stance relieved investors fearing monetary and geopolitical instability, leading to a broad-based rebound across the S&P 500, Nasdaq, and Dow Jones.

2. How did Wall Street interpret Trump’s reversal on Powell and tariffs?

Investors saw it as a sign of institutional stability and potential policy moderation. Trump’s comment that he “never did” intend to fire Powell helped defuse speculation of Fed disruption. Simultaneously, talk of slashing Chinese tariffs—even if contradicted by Treasury officials—signaled a pivot away from confrontation, reigniting risk-on sentiment.

3. Why hasn’t the crypto market rallied in tandem with equities—yet?

Crypto markets are still in a wait-and-watch phase, gauging whether Wall Street’s optimism will translate into sustained macro relief. Bitcoin and Ethereum had previously shown signs of decoupling from equities amid volatility, and while they remain sensitive to monetary policy cues, their reactions often lag behind traditional markets during relief rallies.

4. Could crypto benefit if the political softening trend continues?

Yes. A continued easing of political rhetoric, along with the possibility of future Fed rate cuts and ongoing dollar weakness, could provide the ideal conditions for a crypto resurgence. Assets like Bitcoin may temporarily lose their hedge appeal if macro fear recedes—but could still rally on liquidity, ETF inflows, and renewed institutional interest.

5. What should crypto investors watch for in the short term?

The next 72 hours are critical. If Bitcoin and Ethereum begin to climb in response to the equity rally, it may signal the start of a broader risk-on rotation. Key indicators include ETF inflows, dollar movement, and any shifts in Fed language. The sustainability of macro calm will likely determine whether digital assets follow equities into bullish territory.