Wall Street's "sell America" trade showed signs of breaking down on Wednesday as US stocks roared higher in a broad-based rally sparked by easing trade tensions.

Markets surged after a Wall Street Journal report said the White House is considering cutting tariffs on Chinese imports to as low as 50%, down sharply from the current 145%. The report added fuel to a rebound already underway following President Trump's softer stance on trade and monetary policy.

Treasury Secretary Scott Bessent later denied the Trump administration is considering unilaterally slashing tariffs on Chinese imports, which took some steam out of the rally.

In the days leading up to Wednesday's rebound, investors had been dumping both US stocks and traditional safe havens , with the 10-year Treasury yield ( ^TNX ) spiking above 4.4% and the US dollar ( DX-Y.NYB ) sinking to its lowest level since 2022.

The unusual move, pulling back from both risk assets and volatility hedges, is seen as a rare dislocation, with strategists dubbing it the infamous "sell America" trade. But those trends reversed sharply in early Wednesday trade: The 10-year yield dropped about seven basis points to around 4.3%, and the dollar edged closer to the psychologically important 100 level.

Meanwhile, gold ( GC=F ), which had set several records in recent days as investors flocked to non-dollar-denominated, globally recognized stores of value, retreated on Wednesday to around $3,290 per ounce — further signaling that the "sell America" trade was winding down.

In addition to favorable trade developments, Trump's decision to backtrack on his attempt to remove Federal Reserve Chair Jerome Powell helped calm investor concerns.

Since the president's "Liberation Day" announcement earlier this month, investors have been navigating a volatile market compounded by multiple economic shocks that include tariffs, slowing growth, and escalating geopolitical tensions.

Read more: The latest news and updates on Trump's tariffs

But the president has signaled he's been paying attention to the noise, leading some strategists to suggest he may now be more focused on market reactions to his policies than before. Previously, the Trump administration claimed that it was not monitoring the stock market during the recent sell-off.

"There was more of an attention paid to the market volatility, especially the 10-year yield , not just the stock market," Keith Lerner, Truist co-chief investment officer and chief market strategist, told Yahoo Finance. "I think there's a 'put' on how far or how high Trump will feel comfortable with the 10-year Treasury yield as well."

'Ongoing attempt' to reestablish stability

Typically, when stocks and bonds move in the same direction, it's due to soaring inflation that drives the dollar higher. This time, however, a crisis of confidence appeared to be disrupting the usual dynamics.

Key members of the president's team, including Treasury Secretary Scott Bessent, have attempted to assuage investor concerns.

In a speech on Wednesday, Bessent said with regard to tariffs, "I wish to be clear America First does not mean America alone. To the contrary, it is a call for a deeper collaboration and mutual respect among trade partners."

Read more: What Trump's tariffs mean for the economy and your wallet

Bessent stressed the importance of maintaining a stable US dollar amid recent market fluctuations, saying, "The US will remain the world's reserve currency throughout my lifetime."

Francesco Pesole, FX Strategist at ING, told Yahoo Finance the White House had initially anticipated a stronger dollar in response to tariffs, which would protect US consumers from higher prices. Instead, that decline in confidence triggered the dollar sell-off.

This was likely "not something that Bessent was happy with," Pesole said. "I believe that there is an ongoing attempt to reestablish at least some stability in the dollar for the period that the first inflationary hit will occur in the US."

As investors continue to digest fast-moving headlines, some strategists are warning that more volatility is likely ahead.

"I think it's a relief rally," Chris Versace, chief investment officer at Tematica Research, said. "People were so concerned about the impact of [China tariffs]. The impact of the economy, the impact of earnings guidance that we'd be getting over the next couple of weeks. So to me, it's more of a relief rally."

But "there's still going to be an impact," he warned. "I think we'll have to wait it out and see exactly where these new round of potential tariffs go. At the same time, what is China's response to this? They have reciprocal tariffs on us. Are they willing to play ball? We'll have to see."

Alexandra Canal @allie_canal , LinkedIn,

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