The Dow Jones industrial index and the broad S&P index increased by 1.1 and 1.7 percent, respectively, while the tech-heavy Nasdaq composite index rose as much as 2.5 percent.
Even larger increases were seen in the hours following the opening. This came after US President Donald Trump announced that he had no plans to fire Federal Reserve Chairman Jerome Powell and opened up for scaling down the trade war with China.
The three indexes did, however, fall back somewhat during the day.
Several major companies with high exposure to China performed strongly, including Apple and Nvidia, up 2.4 and 3.9 percent, respectively. Even the heavily pressured electric car manufacturer Tesla did well, standing at a plus 5.4 percent at the close.
"The market has prayed"
During an appearance at the International Finance Institute (IIF) in Washington, US Finance Minister Scott Bessent said on Wednesday that "there is an opportunity for a big deal here", referring to the trade war with China.
He also continued to say that "if they want to rebalance, let's do it together".
This is exactly what the market has prayed for – the slightest indication of a cooling down in the trade conflict between the US and China, says Keith Buchanan, portfolio manager at financial analysis firm Globalt Investments, to CNBC.
Mutual reduction
The Wall Street Journal reported on Wednesday, citing sources in the White House, that the Trump administration is considering reducing tariffs on China to between 50 and 65 percent.
A White House official later told CNBC that such a measure would have to be mutual – i.e., China would also need to reduce its tariffs on the US.
