Wall Street Surges After Trump Pauses Most Tariffs \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ U.S. stocks posted one of their biggest gains in decades after President Trump announced a 90-day pause on most tariffs. The S&P 500 soared 9.5%, the Dow surged nearly 3,000 points, and the Nasdaq jumped 12.2%. However, tariffs on Chinese goods were raised significantly, keeping trade tensions alive.
Quick Looks
- President Trump pauses most tariffs for 90 days, excluding China.
- S&P 500 jumps 9.5%, Dow gains nearly 3,000 points.
- Nasdaq posts 12.2% gain, nearing a record daily rise.
- Tariffs on Chinese goods raised to 125%, tensions remain high.
- Treasury yields fall after spike earlier in the week.
- Wall Street recovers from near-bear market territory.
- Airline and travel stocks lead broad market surge.
- Global markets fell before Trump’s announcement; Chinese stocks rose.
Deep Look
Wall Street erupted into one of its most euphoric rallies since World War II on Wednesday after President Donald Trump announced a temporary halt to most of his recently imposed tariffs. The move, which investors had been anxiously anticipating, came in the form of a social media post declaring a 90-day pause on duties targeting more than 75 countries actively engaged in trade negotiations with the U.S.
The relief on Wall Street was immediate and profound. The S&P 500 skyrocketed 9.5%, marking one of its strongest one-day performances in history. The Dow Jones Industrial Average soared nearly 3,000 points, and the Nasdaq Composite surged 12.2%, a gain equivalent to an entire year’s performance in normal conditions.
This dramatic turnaround followed days of sharp losses, triggered by mounting fears that escalating tariffs would tip the global economy into recession. Prior to Wednesday’s rally, the S&P 500 was hovering dangerously close to bear market territory—defined as a 20% drop from recent highs. By market close, it had clawed back much of its losses and stood just 13% below its previous record.
The trigger for this market rebound came from Trump’s post: “I have authorized a 90 day PAUSE,” he wrote, referring to his aggressive tariff strategy. According to Treasury Secretary Scott Bessent, the administration is pausing its “reciprocal” tariffs on most trading partners while keeping a 10% base tariff on global imports. However, tariffs on Chinese goods were not only preserved—they were sharply increased to 125%, signaling continued strain in U.S.-China relations.
Despite the rally, analysts warned the trade war is far from over. China responded swiftly, announcing that it would raise tariffs on U.S. goods to 84%. In a strongly worded statement, the Chinese Ministry of Commerce said, “If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end.”
Amid the global standoff, Treasury yields, which had risen sharply earlier in the week, fell slightly after Trump’s announcement. The 10-year Treasury yield, which had approached 4.50% in the morning, dropped to 4.37%, still elevated compared to earlier in the week. Rising yields tend to increase borrowing costs, pressure corporate earnings, and weigh on household spending—factors that had already begun to ripple through the economy.
The rally was broad-based, with 98% of the S&P 500 stocks closing higher. Travel and leisure companies saw some of the biggest gains, as the easing of trade tensions is expected to lift consumer and business confidence. Delta Air Lines surged 20.2%, reversing earlier losses after the company had withdrawn financial guidance for 2025 due to trade uncertainty. Other airlines and hospitality stocks also rebounded.
Investors had grown skeptical about whether Trump would respond to market signals, especially as the stock market had plunged nearly 19% from recent highs due to his aggressive trade stance. Traditionally a president who boasted about record Dow levels, Trump’s sudden policy pivot on Wednesday appeared to acknowledge the economic risks his tariffs were posing.
Meanwhile, bond markets stabilized following a volatile week, as institutional investors adjusted portfolios in response to shifting economic expectations. Analysts pointed to forced sales of U.S. Treasurys by hedge funds and international investors looking to cover equity losses or reduce exposure to U.S. markets. These sales had driven yields higher, but Wednesday’s Treasury auction proceeded without major disruption, calming nerves.
International stock markets were largely left out of the celebration, having closed before the U.S. announcement. London’s FTSE 100 fell 2.9%, Tokyo’s Nikkei 225 declined 3.9%, and France’s CAC 40 dropped 3.3%. Chinese markets were an exception, with Hong Kong gaining 0.7% and Shanghai climbing 1.3%, likely buoyed by rumors of a potential easing in tensions even before Trump’s confirmation.
Despite the market celebration, the trade war’s long-term impact remains uncertain. While Wednesday’s gains reflect investor optimism about short-term relief, the lingering hostility between the world’s two largest economies poses ongoing risks to global trade, corporate profits, and economic stability. With tariffs on Chinese goods still escalating and retaliatory threats looming, volatility is expected to persist.
As Treasury Secretary Bessent warned: “Do not retaliate, and you will be rewarded.” The world is now watching to see how China, Europe, and other major players will respond.
For now, though, Wall Street is breathing a sigh of relief, as the pause buys markets time—and perhaps gives policymakers space to negotiate a less disruptive path forward.
Wall Street Surges Wall Street Surges
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