Stocks surge as Trump pauses some tariffs; China retaliates with higher levies, raising concerns over economic stability.

In Short

U.S. stocks rallied after Trump announced a 90-day pause on certain tariffs, boosting market confidence despite ongoing economic concerns.

The Nasdaq, S&P 500, and Dow saw significant gains, but fears of a recession and global equity declines persisted.

U.S. stocks surged on Wednesday following President Trump’s announcement of a 90-day pause on certain tariffs for most countries, shared via social media.

Market volatility increased, with stocks rebounding after an initial downturn. Around 1 p.m. in New York, Trump’s post significantly boosted all three major indexes, resulting in one of their best performances.

By midafternoon, the market gained approximately $4.8 trillion in value. Trump stated that over 75 countries sought negotiations, which led to his decision to pause tariffs, introducing a reduced reciprocal tariff of 10%.

Stable economy

Despite the upbeat news, Treasury Secretary Scott Bessent indicated the economy remains stable, while JPMorgan’s CEO suggested a potential recession was looming. Trump’s new tariffs on nearly 100 nations took effect, including a 125% tariff increase on Chinese imports, which prompted Beijing to raise its levies on U.S. goods.

Market nervousness about holding long-term U.S. Treasurys contributed to a selloff in global equities, with significant declines in Japan and Europe. Furthermore, Trump signalled upcoming levies on pharmaceuticals, resulting in a decline in stocks like Merck and Pfizer.