April 23 (Reuters) - U.S. stock index futures leapt on Wednesday after President Donald Trump pulled back on his threats to fire Federal Reserve Chair Jerome Powell and raised hopes for a trade deal with China.
Shares of Tesla (TSLA.O), meanwhile, rose 7% in premarket trading, as the EV-maker kicked off "Magnificent Seven" earnings on a positive note.
The company reported a profit for its core auto business that topped rock-bottom expectations, while CEO Elon Musk said he would step back from his involvement in the Trump administration to focus on running his numerous companies.
Trump said on Tuesday that he had "no intention" of firing Fed Chair Jerome Powell, backpedaling after his comment that Powell's termination could not come "fast enough" drew heavy criticism.
Markets welcomed the change in the president's tone and futures jumped in extended trading on Tuesday. Trump's criticism of Powell had fueled concerns about the central bank's autonomy and led to sharp losses in U.S. assets including stocks and the dollar earlier in the week.
"These (Trump's latest) comments have given markets a sense of optimism that recent chaos might have peaked and we're heading towards calmer waters," said Russ Mould, investment director at AJ Bell.
"It almost suggests that someone told him (Trump) it's time to be more responsible with his words and actions."
Trump's erratic trade policies have battered Wall Street this year, with the S&P 500 (.SPX), still down nearly 14% from its February record high.
Meanwhile, hopes for trade negotiations between the U.S. and China, which have been locked in an escalating tit-for-tat tariff war, also helped lift sentiment after Trump expressed optimism that a trade deal with Beijing could "substantially" lower tariffs on Chinese goods.
At 07:34 a.m. ET, Dow E-minis were up 682 points, or 1.73%, S&P 500 E-minis were up 121.75 points, or 2.29%, while Nasdaq 100 E-minis were up 492.75 points, or 2.68%.
Megacap tech stocks rose broadly, with Nvidia (NVDA.O), gaining 5.3%. Alphabet (GOOGL.O), which will report quarterly results on Thursday, added 2.4%.
Apple (AAPL.O), and Meta Platforms (META.O), were fined 500 million euros ($570 million) and 200 million euros, respectively, for breaching European Union law, but the companies rose in premarket trading.
Although the U.S. president backtracked on his statements about firing Powell, he said he wanted the Fed to be more active in lowering interest rates. Central bank policymakers have reiterated caution in easing policy, given the lack of clarity on the impact of Trump's trade policies.
Markets lifted bets that the Fed would keep rates on hold at its next meeting, seeing a 92.6% chance of no change in policy, according to CME's FedWatch.
Investors will continue to monitor company results for more clues on the impact of tariffs on earnings and consumer behavior.
Boeing (BA.N), gained 4.4% after its quarterly results, while Boston Scientific (BSX.N), gained 8.6% aftertopping revenue and profit estimates in the first quarter.
Intel (INTC.O), rose 4.9% after a report the chipmaker was set to cut over 20% of its workforce.
S&P Global PMI surveys expected on the day will be watched to see how tariffs are impacting businesses, while comments from four Fed speakers are also on deck.
Reporting by Lisa Pauline Mattackal and Purvi Agarwal; Editing by Shinjini Ganguli and Pooja Desai
