In a magical turn of events Wall Street Soars as Trump Pauses Tariffs for 90 Days — Markets Breathe a Sigh of Relief. A 90-day pause was announced by U.S. President Donald Trump on his controversial “reciprocal tariffs.” This turn of event sent shock waves through global financial markets, and the pause was announced for nearly 60 countries. This dramatic move caused one of the biggest one-day rallies on Wall Street in decades, and investors reacted with euphoria and markets across the globe followed suit.
Wall Street Soars as Trump Pauses Tariffs for 90 Days — Markets Breathe a Sigh of Relief
Trump’s Tariff Pause Sparks Historic Market Rally
Majority of new tariffs were paused by President Trump and this sent U.S. stocks soaring. The tech-heavy Nasdaq Composite rocketed 12.2%, marking its biggest single-day gain since 2001, S&P 500 jumped 9.5% — its third-best day since World War II while Dow Jones Industrial Average surged 2,962 points, or 7.9%.
In a post on X Trump wrote, “I have authorized a 90-day PAUSE,” crediting ongoing negotiations against his recent tariff hikes with over 75 countries that chose not to retaliate. Later Treasury Secretary Scott Bessent confirmed that a 10% tariff on most global imports, would be maintained by the administration except China with a sharp escalation of 125%.
Markets Rebound Globally — Asia and Europe Rally
Wall Street’s relief was echoed in Asian markets as well. South Korea’s KOSPI climbed 5% while Australia’s ASX200 gained nearly the same and Japan’s Nikkei 225 leapt 8.5% by mid-morning. Over 9% surge was seen in European equity futures, pointing to a widespread rebound.
Chief Asia economist at HSBC, Frederic Neumann said, “This is a textbook relief rally. The 90-day delay allows crucial breathing room for negotiations and provides hope to export-driven economies that had feared the worst.”
Despite China being ruled out from the tariff pause, markets in China edged upward. Shanghai’s Composite climbs to 1.3%, while Hong Kong’s Hang Seng escalated to 0.7%.
China Hit Hard as Tariffs Surge to 125%
The temporary reprieve benefited much of the world where as China was hit hard with increase in duties. Tensions between the world’s two largest economies reignited as Trump increased tariffs on Chinese imports to a staggering 125%.
The Chinese Ministry of Commerce was quick to respond, raising tariffs on U.S. goods to 84% by Thursday noon and vowed to take necessary countermeasures. Despite this, the state-run People’s Daily published an op-ed, emphasizing the “symbiotic” relationship, particularly in agricultural trade between the two countries.
The piece, published, highlighted the $24.5 billion in U.S. agricultural exports to China last year, with soya beans playing a critical role. The op-ed was published in both Chinese and English, and hinted Beijing remains open to negotiations, despite the tariffs.
Wall Street Rally Pulls Stocks Back from the Brink
Fears of a global recession loomed large just days ago, as Trump triggered market volatility with his aggressive trade policy. From its all-time high, the S&P 500 was down by nearly 19% at one point. A massive rally on Wednesday helped pull the index away from entering official bear market territory — a drop of 20% or more.
Trump posted on social media, “This is a great time to buy,” urging Americans to remain calm and continue investing. With the sentiment echoing across the trading floors, S&P 500 stocks posted 98% gains.
The travel and consumer-focused companies were leading the charge. Delta Air Lines soared 23.4% despite earlier pulling its 2025 financial forecast due to the trade war’s impact on consumer confidence.
Goldman Sachs Reverses Recession Call
Earlier prediction was retracted by Goldman Sachs economists of a U.S. recession within the next 12 months. After Trump’s announcement, citing improved sentiment and market stability they stated “We are now reverting to our previous non-recession baseline forecast.”
With a successful $39 billion auction of 10-year U.S. Treasury bonds, amid trade tensions, the investors took comfort and also calmed nerves about foreign appetite for U.S. debt. Yields on 10-year Treasuries from 4.01% last week to 4.34%, up, signaling improved investor confidence.
Uncertainty Still Looms Despite Rally.
Analysts urged caution, despite the bullish day. Mark Hackett of Nationwide advised “Avoid the temptation to chase momentum and keep emotions in check. We’re not out of the woods yet.”
Rewarding some countries while punishing others, which is Trump’s targeted approach at present has raised concerns about long-term economic planning and predictability. The policy may be viewed by Beijing, as a calculated strategy to isolate China, which can further complicate diplomatic efforts.
“Trump’s singling out of China will likely reinforce the view in Beijing that there is a coherent strategic plan to contain and suppress China, even if one does not appear to exist” a prominent Chinese analyst, Bill Bishop wrote in his Sinocism newsletter.
Conclusion: A Temporary Respite in a Volatile Trade War
Lifting spirits on Wall Street and beyond, the 90-day tariff pause has provided a much-needed breather for global markets. However, a massive hike in tariffs and exclusion of China from the pause may spell more turbulence ahead. On Wednesday the markets celebrated while the broader trade war remains unresolved.
The coming weeks will be critical in determining whether this pause leads to meaningful negotiations — or merely sets the stage for the next phase of economic conflict.
Also Read: U.S. stocks slump again as euphoria over Trump’s tariff pause fades
