Stock Market Soars as Trump Temporarily Pauses Tariffs
Date: April 10, 2025
By: Brett LoGiurato, Karen Friar, and Josh Schafer
In a remarkable turn of events in the financial markets, U.S. stocks surged on Wednesday following President Donald Trump’s announcement of a 90-day pause on reciprocal tariffs for most countries. This declaration, however, comes alongside a significant increase in tariffs for China, raising concerns over the ongoing trade tensions.
Market Reacts to Tariff Pause
On Wednesday, the benchmark S&P 500 index experienced a historic jump of over 9.5%, marking its best performance since the financial crisis of 2008. The tech-heavy Nasdaq Composite soared by an impressive 12%, its second-best day on record, while the Dow Jones Industrial Average surged by approximately 3,000 points, or over 7.8%.
“I have authorized a 90-day PAUSE and a substantially lowered Reciprocal Tariff during this period, effective immediately,” Trump wrote on Truth Social, just before the market took off. He also announced an increase in tariffs on Chinese imports to 125%.
A Call for Celebration
Trump later acknowledged the stock and bond markets’ buoyant responses, stating, "I thought people were jumping a bit out of line." He described the day’s trading activities as potentially the "biggest day in financial history." The announcement was well-received on Wall Street, particularly within the technology sector, leading to extraordinary gains for major tech stocks. Nvidia (NVDA) jumped over 18%, while Tesla (TSLA) surged nearly 23%. Other tech giants such as Apple (AAPL) and Meta (META) also saw significant increases, with shares rising about 15% and 12% respectively.
Impact of Tariff Changes
Despite the positive market reaction, the ongoing trade war with China continued to pose challenges. Following Trump’s announcement, Chinese officials retaliated by increasing tariffs on U.S. goods, with duties to be raised to 84%, effective Thursday. The escalating trade tensions have caused volatility in the markets, which had already been showing signs of instability with the Nasdaq entering bear territory prior to the announcement.
Trump’s unexpected reversal on the new tariffs came after a week marked by drastic tariff adjustments that had initially rattled investors. Just the previous week, markets had been shaken by steep tariffs on countries like Vietnam, Japan, and India, prompting fears of a broader economic downturn.
Expert Insights
Market analysts noted that the shift provided a "dose of relief" for investors. Michael Kantrowitz, chief investment strategist for Piper Sandler, commented that while uncertainty isn’t completely erased, the worst-case scenarios are removed from consideration, leading to a healthier market outlook.
Former Treasury Secretary Larry Summers warned, however, that amidst the positive sentiment, the U.S. economy was not yet completely in the clear. He emphasized the need for a cautious approach as the ramifications of fluctuating tariffs continue to unfold.
Conclusion
Wednesday’s unprecedented market rally underscores the significant influence that tariff policy and presidential announcements can have on investor sentiment and market dynamics. As tariff negotiations and retaliations continue to evolve, all eyes will remain on the administration’s next steps and their implications for the economy and global trade relations.
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