The US stock markets experienced one of their most remarkable rallies in history on Wednesday, following President Donald Trump’s announcement of a temporary pause in some of his “reciprocal” tariffs. This decision provided much-needed relief to a market that had been under intense pressure for the past week, sparking a dramatic rebound across major indices.
US Stock Market Indices Performance
The S&P 500 soared 9.52% to close at 5,456.90, marking its biggest one-day gain since 2008 and the third-largest post-WWII increase. The Dow Jones Industrial Average surged 2,962.86 points, or 7.87%, to end at 40,608.45, achieving its largest percentage advance since March 2020.
Meanwhile, the Nasdaq Composite jumped 12.16% to settle at 17,124.97, recording its second-best day ever and its largest one-day gain since January 2001.
Trading volume reached unprecedented levels, with approximately 30 billion shares changing hands, making it the heaviest volume day on Wall Street in history according to records spanning 18 years.
US Tariff Developments
President Trump announced a 90-day pause on tariffs, reducing the reciprocal tariff rate to 10% during this period, effective immediately. However, he also stated that tariffs on China would be raised to 125%, signaling continued tensions with Beijing. Treasury Secretary Scott Bessent clarified that all countries except China would return to the 10% baseline tariff rate as negotiations proceed. Sector-specific tariffs, however, remain unaffected by the pause.
US Stock Markets Sector and Stock-Specific Impacts
Stocks that had been heavily impacted by trade war tensions led the recovery. Apple and Nvidia saw significant gains, rising more than 15% and nearly 19%, respectively. Walmart shares rallied 9.6%, while Tesla surged over 22% following the pause announcement.
The announcement of the tariff pause sparked optimism among traders, who had been grappling with escalating trade tensions and a four-day market rout. Over the previous four sessions, the Dow had lost more than 4,500 points, while the S&P 500 and Nasdaq Composite had fallen 12% and 13%, respectively. These losses were reminiscent of the market turmoil during the COVID-19 pandemic.
Adam Crisafulli, founder of Vital Knowledge, noted that the pause has provided a reprieve for the US Stocks and global markets, sparking a violent rebound. However, he cautioned that tariffs are not going away, and uncertainty remains about what will happen after the 90-day pause concludes.
As negotiations unfold, the US stock markets are likely to remain volatile. The White House clarified that Mexico and Canada would not be affected by the tariff pause, providing some stability for trade relations with these key partners. Investors will be closely monitoring developments in tariff talks and their potential impact on global trade and market performance.
This historic rally underscores the resilience of the US stock markets in the face of policy-driven uncertainty.
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