Stock Market Soars as Trump Announces 90-Day Tariff Pause
April 9, 2025 — The U.S. stock market experienced a remarkable surge on Wednesday, with the Dow Jones Industrial Average soaring nearly 3,000 points, equivalent to over 7.8%. The S&P 500 Index recorded its best one-day performance since 2008, climbing more than 9.5%. The surge comes on the heels of President Trump’s announcement that he would implement a 90-day pause on tariffs for most countries, although he simultaneously declared that tariffs against China would increase significantly.
Positive Market Reaction to Tariff News
In a post on his social media platform, Truth Social, President Trump stated, "I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately." This announcement was met with enthusiasm on Wall Street, as traders interpreted it as a move to alleviate some of the tensions that had led to recent market volatility.
Trump also noted that the U.S. would raise its tariffs on Chinese imports to an unprecedented 125%, acknowledging the complexity of the current trade dynamics between the two major economies. The decision to pause tariffs on non-retaliating countries provided investors with hope and clarity, contributing to a significant uptick in stock prices across the board.
Historic Gains for Major Indices
The tech-heavy Nasdaq Composite added an impressive 12% to its valuation, marking its best day since 2001. Major tech giants spearheaded the rally, with Nvidia surging over 18%, Tesla almost 23%, and both Apple and Meta climbing around 15%. These gains reflected investor sentiment that the easing of tariff tensions could lead to a more favorable environment for growth in the technology sector.
In comparison, the benchmark 10-year Treasury yield rose to nearly 4.4%, indicating a complex interplay between rising yields and heightened stock values. Despite the enthusiasm in the stock market, analysts remain cautiously optimistic, considering how quickly the situation could shift again.
Trade Tensions and Market Volatility
This latest development follows a week of heightened uncertainty regarding U.S. trade policy. The initial roll-out of reciprocal tariffs had caused considerable anxiety among investors, pushing the Nasdaq into bear market territory. Trump acknowledged the previous financial turmoil, stating, "Last night, people were getting a little queasy," while asserting that the day’s events marked "the biggest day in financial history."
In light of the tariff pause, Piper Sandler chief investment strategist Michael Kantrowitz expressed a sense of relief, suggesting that while uncertainty remains, the worst-case scenarios had largely been mitigated.
Global Economic Implications
China responded to the U.S. tariffs on Wednesday by announcing that its own duty rates would rise to 84% on U.S. imports, further complicating the global trade landscape. Analysts are mindful that while the immediate reaction in the U.S. markets is overwhelmingly positive, the broader repercussions of these tariffs, particularly between the U.S. and China, are yet to fully unfold.
As investors digest the implications of Trump’s announcements, economists warn that while this pause is a move towards stability, the underlying issues in U.S.-China relations remain unresolved. Former Treasury Secretary Larry Summers commented that the U.S. economy is "far from being out of the woods," signaling the ongoing challenges that may affect market stability in the months to come.
In summary, while today celebrated an extraordinary upswing in the stock market, the path forward remains fraught with uncertainties that could influence economic conditions and stock performance in the future.
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