President Donald Trump announced a 90-day pause on some tariffs, with the exception of those on China. Wall Street reacted positively to the announcement, with the Dow Jones Industrial Average skyrocketing 2,963 points, or 7.87%. The S&P 500 shot up 9.52%, and the tech-heavy Nasdaq soared 12.16%, posting historic gains.
Nearly every company in the S&P 500 saw gains. Major winners included Amazon, which rose 11.98%, and Nike, which gained 11.36%. Airlines also saw significant surges, with United Airlines rising 26.14%, Delta Air Lines 23.38%, and American Airlines 22.6%.
On the Nasdaq, Apple surged 15.33%, Nvidia rose 18.72%, and Tesla gained 22.69%. Despite the sharp rebound, both the S&P 500 and the Nasdaq remained down from their pre-tariff announcement levels. Uncertainty still lingers as Trump’s policies toward China remain aggressive.
The tariff rate on Chinese goods was raised to 125% from 104%, coupled with sector-specific tariffs like those on autos. Global markets showed mixed reactions.
Trump’s tariff pause boosts stocks
Japan’s Nikkei index closed down 4% while the Hang Seng finished marginally higher. European markets also took a hit with the STOXX 600 index down 3.5%, and significant drops in France’s CAC and Germany’s DAX indices. US oil prices reversed earlier losses, climbing 4.65% to $62.35 a barrel.
The global benchmark Brent crude gained 4.23% to $65.48 a barrel. Both had hit their lowest levels since 2021 before the surge. US Treasury yields have risen as investors sold off bonds, with the 10-year yield now above 4.3%.
“The bond market is very tricky,” said Trump. “But if you look at it now, it’s beautiful.”
The trade war has sparked fears of a global recession, impacting both businesses and consumers. Hiring rates and consumer spending have slowed, contributing to market volatility.
Deutsche Bank analysts warned that the sell-off in Treasury bonds might signal weakening demand for US-backed assets. This sentiment was echoed by JPMorgan CEO Jamie Dimon, who noted concerns about America’s special standing in global markets during trade negotiations. Amidst these fluctuations, investors continue to navigate a challenging landscape, awaiting further developments in the ongoing trade tensions.
Image Credits: Photo by PortCalls Asia on Unsplash
