U.S. stock markets surged today after President Trump declared a 90-day suspension on most of his “reciprocal” tariffs, with the exception of China, which he hit with a steep 125% levy, citing their “lack of respect.”
The Dow Jones Industrial Average soared by 2,962.86 points, or 7.9%, marking its biggest single-day points gain ever, closing at 40,608.45. This came after Trump shared on Truth Social that he would pause the significant tariffs, responding to requests from over 75 countries who sought to engage in negotiations.
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump posted on Truth Social, sending Wall Street into a rally.
The S&P 500 surged close to 10%, and the Nasdaq 100 rose more than 12%, as the major stock indices rebounded from early-morning declines, which had been triggered by fears of China imposing an 84% retaliatory tariff on the U.S.
“I think the hope from the outset — for most of the business community — was that Trump’s tariffs were a negotiating tactic, and that he would be willing to negotiate them down,” Alan Sykes, senior fellow at the Stanford Institute for Economic Policy Research, shared with The NY Post.
“He’s reversing course to a certain extent, while at the same time still listening to the China hawks,” Sykes remarked.
Trump’s move comes after a dramatic week in which the Dow lost around 5,000 points due to fears that his “reciprocal” tariffs could spark inflation and potentially lead to a recession.
The announcement of China’s massive retaliatory tariff unsettled investors earlier on Wednesday, as the proposed tax threatened to hurt U.S. companies that rely on “Made in the USA” branding and drive up costs across domestic supply chains.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump wrote on his post Wednesday afternoon.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”
Carol Schleif, chief market strategist at BMO Private Wealth, commented that investors were eagerly awaiting any positive signs about the tariffs. As a result, the 90-day pause was a welcome relief for the markets.
On Tuesday, the Dow briefly surged by over 1,400 points after reports emerged that negotiations were underway with countries like South Korea, Japan, Indonesia, and Vietnam. However, those gains vanished by the afternoon after the White House announced plans to impose another round of tariffs on China, resulting in a 320-point drop in the Dow by the end of the day.
{Matzav.com}