US Stocks Soar After Trump Announces Temporary Tariff Pause — Details

Trump’s afternoon announcement included a 90-day suspension of tariffs for many countries, though he simultaneously raised duties on Chinese imports to 125 per cent

In the bond market, benchmark 10-year Treasury prices pared earlier losses after the US Treasury Department's afternoon auction attracted strong demand

Source : other

Stock indexes recorded their biggest one-day surge in years on Wednesday, as President Donald Trump’s surprise announcement of a temporary pause on US tariffs sent a wave of relief through the markets. The S&P 500 soared 9.5 per cent—its largest single-day gain since 2008—while the Nasdaq jumped 12.2 per cent, marking its biggest rally since January 3, 2001, and the second-largest on record.

The dramatic market turnaround came after a turbulent morning, during which bond prices fell and the US dollar slipped amid fears that the administration’s aggressive tariff plans—reminiscent of protectionist levels not seen in over a century—could tip the economy into recession.

Trump’s afternoon announcement included a 90-day suspension of tariffs for many countries, though he simultaneously raised duties on Chinese imports to 125 per cent. While the move temporarily calmed markets, investors remain wary, as questions still loom over the administration’s long-term trade strategy.

Quarterly Results

Investors are closely watching the upcoming US quarterly earnings season for fresh clues about the health of corporate America. Several major banks, including JPMorgan Chase, are set to report results on Friday, which could offer a clearer picture of how businesses are navigating a volatile economic environment.

Treasuries

In the bond market, benchmark 10-year Treasury prices pared earlier losses after the US Treasury Department's afternoon auction attracted strong demand. The yield on the 10-year note rose 6.8 basis points to 4.328 per cent, after briefly reaching 4.515 per cent—its highest level since February 20. (As a reminder, bond yields move inversely to prices.)

Earlier in the week, Treasuries had come under heavy pressure amid a sharp selloff and reports of large-scale bond liquidations, raising concerns about weakening market liquidity. At the same time, the dollar had been trending lower ahead of President Trump's announcement, reflecting growing unease among investors.

Tariff Announcement 

Since Trump's April 2 declaration of sweeping new tariffs, US assets have experienced a broad and deep decline. In a note released Wednesday, analysts at Deutsche Bank warned that markets had "lost faith" in the administration’s economic direction, suggesting the world could be heading into uncharted territory in the global financial system.

However, markets staged a dramatic comeback after Trump announced a 90-day pause on tariffs for many countries, even as he raised levies on Chinese imports to 125 per cent. The US dollar rebounded sharply, with the dollar index climbing 0.25 to 103.03. The euro slipped 0.08 per cent to $1.0947, while the dollar strengthened 1.04 per cent against the yen and 1.01 per cent versus the Swiss franc.

US equities surged in response to the announcement. The Dow Jones Industrial Average jumped 2,962.86 points, or 7.87 per cent, to 40,608.45. The S&P 500 soared 474.13 points, or 9.52 per cent, to 5,456.90. The Nasdaq Composite led the charge, surging 1,857.06 points, or 12.16 per cent, to close at 17,124.97—its second-largest one-day gain on record.

Global markets also reacted positively. MSCI’s gauge of stocks across the world rose 42.32 points, or 5.70 per cent, to 785.28. Earlier in the day, before the US announcement, Europe’s STOXX 600 index had closed down 3.5 per cent, highlighting the whiplash effect of policy-driven news.