(Reuters) - The benchmark S&P 500 US stock Index rallied to a two-week high on Wednesday on hopes for a de-escalation in the U.S.-China trade war and as President Donald Trump scaled back his threats to fire Federal Reserve Chair Jerome Powell.

The prospect of negotiations between Washington and Beijing, currently locked in an escalating tit-for-tat tariff war, helped lift sentiment after a Wall Street Journal report cited a senior White House official as saying that U.S. tariffs on China were likely to come down to between roughly 50% and 60%.

The three main indexes were already in recovery mode after Trump said late on Tuesday he had "no intention" of firing Powell, walking back last week's market rattling comment that the Fed chair's termination could not come "fast enough" that had drawn heavy criticism.

In late morning trade, the Dow Jones Industrial Average was up 1.5%, the S&P 500 up 2% and the Nasdaq Composite 3%.

COMMENTS:

CHUCK CARLSON, CHIEF EXECUTIVE OFFICER, HORIZON INVESTMENT SERVICES, HAMMOND, INDIANA

"It seems like (the reasons for the stock market snapback are) multifold. One, some of the comments that have come out of the White House here in the last 24 hours are more positive relative to tariffs, especially China. Two, the comment that (Trump) is not going to fire Powell, even though he probably can't, took some of that uncertainty off the table. Three, you've had some earnings announcements that have been pretty decent. And then finally, you've got short sellers out there really thinking about their positions, especially on the back of yesterday and then strength beginning today. And so I think structurally, you've got a lot of continued short covering that's going on that's driving things higher."

AMELIE DERAMBURE, SENIOR MULTI-ASSET PORTFOLIO MANAGER, AMUNDI, PARIS

"Markets are really hoping that the worst will not happen and are really giving a chance to negotiations and less tariffs being implemented. That's an important element which is lifting U.S. equities, but also as a consequence, global equities, including European ones."

PETER CARDILLO, CHIEF MARKET ECONOMIST AT SPARTAN CAPITAL SECURITIES, NEW YORK "There seems to be some light at the end of the tunnel here in terms of the trade war. Investors are beginning to feel more confident that perhaps the worst of the trade rhetoric is over, that we've probably hit a temporary short-term bottom and stocks are likely to move a little bit higher in the coming days."