Wall Street sees record rally after Trump announces 90-day pause on tariffs from most countries, raises China rate to 125%
- Lori Lee WGOLV
- 4 days ago
- 4 min read
Updated: 4 days ago
WGOLV.COM - US stocks soared on Wednesday after President Trump announced a 90-day suspension of most of his “reciprocal” tariffs, with the exception of China, which faced a 125% levy due to a “lack of respect.”
The Dow Jones Industrial Average surged 2,962.86 points, or 7.9% - marking its largest one-day points gain ever - to close at 40,608.45. This came after Trump posted on Truth Social that he would postpone the harsh tariffs following appeals from over 75 countries seeking negotiations.
Traders on the floor of the New York Stock Exchange react to stocks soaring after Trump’s announced a 90-day pause on tariff hikes for most countries.
PHOTO: REUTERS/Brendan McDermid
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump wrote on Truth Social, sending Wall Street soaring.
The S&P 500 surged almost 10% and the Nasdaq 100 increased by over 12% as the major stock indexes recovered from earlier losses on Wednesday morning, which occurred when investors were alarmed by China's announcement of an 84% retaliatory tariff on the US.
“I think the hope from the outset — for most of the business community — was that Trump’s tariffs were a negotiating tactic, and that he would be willing to negotiate them down,” Alan Sykes, senior fellow at the Stanford Institute for Economic Policy Research, told The New York Post. “He’s reversing course to a certain extent, while at the same time still listening to the China hawks,” Sykes added.
Mike Guillen/NY Post Design
Trump's announcement follows a week-long downturn in which the Dow dropped about 5,000 points, as investors feared that Trump's proposed "reciprocal" tariffs might reignite inflation and potentially lead to a recession.
Earlier on Wednesday morning, China's significant retaliatory tax unnerved investors, as the substantial tariff posed a threat to major domestic companies known for their "Made in the USA" products and was expected to increase costs throughout US supply chains.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump wrote in his post Wednesday afternoon.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”
Carol Schleif, chief market strategist at BMO Private Wealth, mentioned on Wednesday morning that investors are eagerly anticipating even the slightest hint of positive news regarding tariffs. Therefore, the 90-day pause was a much-appreciated relief for the markets.
On Tuesday, a brief morning rally led to the Dow increasing by over 1,400 points after reports emerged about negotiations with foreign countries, including South Korea, Japan, Indonesia, and Vietnam.
However, these gains were entirely erased by the afternoon when the White House announced its intention to raise tariffs on China for the third time this year, resulting in the Dow closing 320 points lower.
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