Wall Street leaps after Trump announces 90-day tariff pause

Wall Street’s main indices soared on Wednesday, with the S&P 500 up by more than 8%, after US President Donald Trump declared a 90-day tariff pause for many countries, effective immediately, bringing relief to investors worried about the global economic impact of US trade policies.

Trump declared the pause on a set of broad tariffs, while raising duties to 125% for China.

China had imposed a levy of 84% on all US goods starting on 10 April, up from the 34% previously announced, after US levies of 104% on Chinese goods went into effect.

While Trump’s announcement still left investors with uncertainty about the ultimate tariff policy, traders went shopping for beaten-down stocks. Since Trump announced broad tariffs late on 2 April, stocks had fallen by more than 12%, for their biggest four-day selloff in five years.

“Markets had been looking for a reason to rally for a few days. Markets can only sustain extreme conditions for so long before exhaustion sets in, rather like a toddler and a tantrum,” said Carol Schleif, chief market strategist at BMO Private Wealth in Minneapolis.

“The 90-day suspension does allow nice breathing room to allow negotiation to settle in and market valuations have clearly been reset. Yet the uncertainty for companies remains.”

At 2.32pm, the Dow Jones Industrial Average rose by 2,736.95 points, or 7.27%, to 40,382.54, the S&P 500 gained 424.20 points, or 8.51%, to 5,406.97 and the Nasdaq Composite gained 1,650.52 points, or 10.77%, to 16,912.34.

All 11 of the S&P 500’s major industry indices were higher after the news, with technology up by 11.85%. Utilities were the slowest gainer, up by 2.69%.

Large technology stocks provided the biggest boost, with Nvidia up by 15% and Apple rising by more than 9%.

“The reflex to buy the dip is very strong, and certainly the wipeout you’ve seen in tech stocks makes them cheap relative to where they were,” said Chris Beauchamp, chief strategist at IG.

The US Treasury’s $39-billion 10-year note auction came in within market expectations, priced at a high yield of 4.435%, lower than the rate forecast at the bid deadline, suggesting solid investor demand.

The yield on the 10-year note was last at 4.39% amid a selloff in the bond market, where tariff-driven turmoil prompted investors to dump safe-haven US Treasuries in a dash for cash, pushing yields higher.

The upcoming earnings season will offer more insights into the health of corporate America as investors fear a hit to economic growth from the tariffs. US banks, including JPMorgan Chase, will report first-quarter results on Friday.

The CBOE Volatility Index — seen as Wall Street’s “fear gauge” — hit a low of 34.54 points after the tariff pause, compared with its high of 57.96 for the session so far.

While the market was rallying on the tariff pause, minutes from the Federal Reserve’s meeting last month were released.

Fed policymakers were nearly unanimous that the US economy faced risks of simultaneously higher inflation and slower growth, with some policymakers noting that “difficult tradeoffs” could lie ahead for the central bank.

A consumer price inflation report is set for Thursday, which could offer clues on the inflation trajectory.

Delta Air Lines shares were up 23.94% after the carrier beat first-quarter profit expectations. The company, though, pulled its 2025 financial forecast and projected current-quarter profit below expectations.

Advancing issues outnumbered decliners by a 4.56-to-1 ratio on the NYSE where there were 26 new highs and 1,154 new lows.

On the Nasdaq, 3,672 stocks rose and 763 fell as advancing issues outnumbered decliners by a 4.81-to-1 ratio.

The S&P 500 posted one new 52-week high and 100 new lows, while the Nasdaq Composite recorded 11 new highs and 642 new lows. DM