President Donald Trump’s recent attacks on Federal Reserve Chair Jerome Powell caused alarm among some of his top advisers, who warned him that any attempt to remove the head of the central bank could cause as much market turmoil as his ongoing trade war, according to people familiar with the conversations.

The warnings — and the markets’ own volatility this week — seemed to have broken through. Trump backed down Tuesday from his threats to try to remove Powell from the job, telling reporters in the Oval Office: “ I have no intention of firing him.”

That prompted sighs of relief on Wall Street. A day after markets boomed on comments from Treasury Secretary Scott Bessent that Trump would seek to de-escalate the trade war with China, US markets surged again.

The Dow gained more than 1,000 points, or 2.5%, Wednesday morning. The broader S&P 500 was up 3%, and the tech-heavy Nasdaq Composite rose 3.9%.

Investors bought US Treasury bonds again, sending the benchmark 10-year yield, which trades in the opposite direction from prices, down sharply below 4.3%.

Top administration officials were also relieved by Trump’s Oval Office statement on Powell, the people familiar with the matter said. The officials had become unnerved by the heated rhetoric and wary of a prolonged legal battle should Trump attempt to unseat the Fed chair.

Many Trump advisers did not ultimately believe the president would attempt to fire Powell, given the warnings he’d been receiving from his economic team — including Bessent — stretching back several months. Trump had seemed to absorb the notes of caution.

But his amped-up rhetoric over the past week had caused fresh uncertainty about his intentions — in particular, his message on social media Thursday that Powell’s “ termination cannot come fast enough! ” and his follow-up Monday calling Powell a “major loser.”

Trump has argued that the Fed should cut rates soon to speed up the economy, perhaps as a way to counteract the significant economic drag that his massive tariffs are expected to create. But Powell has said repeatedly the Fed will only make a decision to raise or lower rates after careful consideration and would not rush a decision or issue an emergency rate cut before the rate-setting committee’s next scheduled meeting in May.

White House press secretary Karoline Leavitt continued Trump’s line of attack Tuesday in a press briefing, in which she defended the president for criticizing the Fed. She suggested that the Fed’s action to lower rates in the late stages of the Biden administration — but not (yet) under Trump — could be political. There is no evidence the independent Fed is taking a political stance, and Powell has vehemently and repeatedly denied suggestions that the Fed plays politics when making its monetary policy decisions.