US stocks rocketed higher on Wednesday as President Trump announced a 90-day pause on tariffs for most countries, yet at the same time upped increasingly ballooning levies on China.
The benchmark S&P 500 (^GSPC) roared up nearly 8% at last check, while the tech-heavy Nasdaq Composite (^IXIC) rallied a whopping 10%, aiming for its biggest gain since 2008. The Dow Jones Industrial Average (^DJI) was up over 7%, or over 2,500 points. All three of the major averages had previously been lower at some point in the session.
“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 just before the market lifted off. Trump also said in the post that the US would be raising its tariffs on China to 125%.
Big Tech led the rally on Wednesday. Nvidia (NVDA) soared over 15% while Tesla (TSLA) added 17%. Apple (AAPL), Amazon (AMZN) and Meta (META) were up about 10%.
Meanwhile, the benchmark 10-year Treasury yield (^TNX) continued a recent surge, moving up near 4.4% after paring some gains.
China had retaliated on Wednesday in an escalating trade war between the world’s two biggest trading partners, which has roiled markets amid worries about the broader economic fallout. Beijing said the hike to 84% duties will take effect on Thursday.
Trump’s abrupt backtrack Wednesday completed a remarkable week of tariff whiplash. Trump’s announcement of the so-called “reciprocal” tariffs stunned markets last week, and massive hikes on Vietnam, Japan, India, and others went into full effect early Wednesday. The Nasdaq has already entered into a bear market, while the S&P 500 and Dow were creeping closer until Wednesday’s sharp move higher.
Trump had weighed in on the volatile market action just after the open on Wednesday, writing on social media that it is a “great time to buy!!!”
“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” he added.
Meanwhile, minutes from the Federal Reserve’s March meeting could show how worried policymakers were about stagflationrisks from Trump’s tariff push. The release due later sets the stage for Thursday’s update on the Consumer Price Index, which will signal where inflation was headed before Trump’s tariffs went into full force.
Former Treasury Secretary Larry Summers, who has been outspoken against President Trump’s tariff plans, warned that Trump’s 90-day reciprocal “pause” did not yet mean that the US economy was “out of the woods.”
While the White House attempted to spin after Trump’s announcement that it was all — roughly — part of the plan, Summers said it was more likely that the administration is “rightly scared” after spooking markets.
“Reckless improvisation not a strategy and total dishonesty about what is driving them,” he said.
Summers on Tuesday had warned that the US was headed toward a recession with up to 2 million lost jobs under the previous tariff regime. As Summers hinted, though, the 10% baseline tariffs remain in effect, as well as duties on specific sectors.
Goldman Sachs economics team published a note just before 1 p.m. ET on Wednesday saying they were “moving to a recession baseline.” Goldman’s team of economists led by Jan Hatzius estimated GDP growth to decline by 1% in 2025 while noting that stance would change should the White House roll back its tariff stance. An hour later, President Trump announced a 90-day pause on a slew of tariffs. And now Goldman Sachs doesn’t see a recession anymore. Though, it should be noted it’s still quite a close call per Hatzius odds. ”We are reverting to our previous non-recession baseline forecast with GDP growth of 0.5% and a 45% probability of recession,” Hatzius wrote.
By Agencies
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