WASHINGTON—M10News | U.S. stock markets posted historic gains on Wednesday after former President Donald Trump announced a 90-day pause on his “reciprocal” tariffs. The decision excluded China, which was slapped with a 125% tariff due to what Trump described as a “lack of respect.”
The Dow Jones Industrial Average skyrocketed by 2,962.86 points, or 7.9%, to close at a record 40,608.45 — marking the most significant one-day point gain in history.
The S&P 500 surged nearly 10%, while the Nasdaq 100 soared more than 12%, reversing early-morning losses that had rattled investors.
The dramatic turnaround came after Trump posted on Truth Social that he would delay most of the tariffs he previously unveiled as part of his “Liberation Day” trade policy, citing active interest from over 75 countries to negotiate direct deals.
“I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump wrote in his post, sparking an immediate rally on Wall Street.
China, however, remains an outlier in Trump’s revised tariff strategy. The former president announced a 125% duty on Chinese imports — up from the already elevated 84% — after Beijing matched the U.S.’s earlier tariff increase, triggering fears of a deepening trade war.
“Based on the lack of respect that China has shown to the World’s Markets, I am raising the tariff charged to China by the United States of America to 125%, effective immediately,” Trump stated. “At some point, hopefully shortly, China will realize that the days of ripping off the U.S.A. and other countries are no longer sustainable or acceptable.”
The move was seen as both a concession and a hardline message. While Trump’s broader pause reassured global markets and spurred optimism, the punitive action against China suggested he remains firm on Beijing.
Analysts say the former president’s volatile approach may have been a calculated negotiating tactic. “I think the hope from the outset — for most of the business community — was that Trump’s tariffs were a negotiating tactic,” said Alan Sykes, senior fellow at the Stanford Institute for Economic Policy Research.
“He’s reversing course to a certain extent, while at the same time still listening to the China hawks.”
Carol Schleif, chief market strategist at BMO Private Wealth, noted the relief on Wall Street was palpable. “Investors are waiting in the wings for the faintest whiff of constructive tariff news,” she said. “This 90-day pause is a more-than-welcome reprieve.”
The stock market’s rebound came after a tense week in which the Dow shed nearly 5,000 points amid fears that Trump’s aggressive tariff policies would reignite inflation and tip the economy into recession.
China’s surprise retaliatory move earlier Wednesday had briefly sent markets spiraling again, with U.S. firms facing higher costs across supply chains and concerns mounting over the economic impact of a prolonged trade war.
A glimmer of optimism had appeared Tuesday morning when the Dow climbed more than 1,400 points amid reports of negotiations with South Korea, Japan, Indonesia, and Vietnam.
However, those gains were erased after the White House confirmed another tariff hike on China later that day, leading the Dow to close down 320 points.
Wednesday’s announcement marked a pivotal moment in Trump’s latest economic campaign. It balanced aggressive trade enforcement with strategic flexibility and offered markets just enough hope to soar.
