Stocks reverse losses after president temporarily eases trade war measures
U.S. stocks staged a dramatic rebound Wednesday after President Trump announced a temporary easing of trade tariffs, sparking the biggest single-day rally in months.
The Dow Jones Industrial Average rocketed up 2,476 points (6.6%) to 39,683 by mid-afternoon, while the S&P 500 surged 7.8% and the tech-heavy Nasdaq composite leaped 9%.
The rally began moments after Trump’s mid-morning Twitter announcement of a 90-day tariff pause and reduction of reciprocal duties to 10%. “Because many nations haven’t retaliated, I’ve authorized this pause for productive negotiations,” the president wrote.
Markets had opened lower amid recession fears, with the S&P 500 down nearly 2% before the announcement. The turnaround came just hours after new U.S. tariffs took effect, including 104% duties on Chinese goods. Beijing responded by vowing 84% tariffs on American products starting Thursday.
Commodities joined the rally, with oil rising 1.5% to $58.32/barrel and gold climbing 3% to $1,512/ounce. The euro gained 0.4% against the dollar at $1.107.
Global markets told a different story: London’s FTSE 100 fell 2.9%, Tokyo’s Nikkei 225 dropped 3.9%, and Paris’ CAC 40 declined 3.3%. Chinese markets defied the trend, with Shanghai up 1.3% and Hong Kong gaining 0.7%.
The rally gained additional support from strong demand at a $24 billion Treasury auction, easing recent bond market tensions that had pushed yields to multiyear highs.