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Updates through late morning trading

By Lisa Pauline Mattackal and Purvi Agarwal

April 23 (Reuters) - Wall Street's main indexes rose on Wednesday as investors welcomed signs of a thaw in the U.S.-China trade war and after President Donald Trump scaled back his threats to fire Federal Reserve Chair Jerome Powell.

The Trump administration would look at lowering tariffs on imported Chinese goods pending talks with Beijing, Reuters reported on the day. That followed a Wall Street Journal report citing 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 prospect of negotiations between Washington and Beijing, locked in an escalating tit-for-tat tariff war, lifted market sentiment, with the S&P 500 .SPX touching a two-week high and the Nasdaq jumping as much as 4.5%.

Those gains built on early momentum after Trump said on Tuesday he had "no intention" of firing Powell, walking back on his comment that the Fed chair's termination could not come "fast enough".

However, indexes pared gains after the U.S. treasury secretary said excessively high tariffs between the two countries would need to come down before trade negotiations could proceed.

"Investors are beginning to feel more confident that perhaps the worst of the trade rhetoric is over and are beginning to focus on some of the fundamentals, like the earnings," said Peter Cardillo, chief market economist at Spartan Capital Securities.

Trump's criticism of Powell had fueled concerns about the central bank's autonomy, leading to sharp losses in U.S. assets, including stocks and the dollar, earlier in the week.

Among key corporate results, Tesla TSLA.O leapt nearly 8% after the EV-maker reported better-than-expected profit for its core auto business. CEO Elon Musk also said he would step back from his involvement in the Trump administration to focus on running his numerous companies.

At 12:01 p.m. ET, the Dow Jones Industrial Average .DJI rose 560.70 points, or 1.43%, to 39,747.68, the S&P 500 .SPX gained 97.84 points, or 1.85%, to 5,385.60, and the Nasdaq Composite .IXIC gained 448.25 points, or 2.75%, to 16,748.67.

Most S&P 500 sectors rose, with the consumer discretionary .SPLRCD and information technology indexes .SPLRCT up more than 3% each.

The small-cap Russell 2000 .RUT gained 2%, while the CBOE Volatility Index .VIX, Wall Street's fear gauge, touched its lowest since April 3.

The apparent U.S. softening on China tariffs was a welcome sign for markets battered by Trump's erratic trade policies, as a result of which the S&P 500 is currently more than 12% below its February record close.

While the benchmark index jumped over 4% over the last two sessions, some market participants remain skeptical of the recent rally, given the continued uncertainty.

"Unless the (U.S.) president or the administration comes out with consistent statements - and by consistent, I mean by more than (a) 24-hour news cycle - this is a temporary rally," said Peter Andersen, founder, Andersen Capital Management.

Boeing BA.N gained 5.9% after reporting a smaller-than-expected quarterly loss.

Advancing issues outnumbered decliners by a 4.46-to-1 ratio on the NYSE, and by a 3.43-to-1 ratio on the Nasdaq.

The S&P 500 posted two new 52-week highs and two new lows, while the Nasdaq Composite recorded 32 new highs and 22 new lows.

(Reporting by Lisa Pauline Mattackal, Purvi Agarwal and Sukriti Gupta in Bengaluru; Editing by Shinjini Ganguli and Pooja Desai)

((LisaPauline.Mattackal@thomsonreuters.com;))