Dow, Nasdaq rocket after Donald Trump’s 90-day tariff pause, except for China

The US President’s ‘switch-a-roo’ on his reciprocal tariff program because investors were ‘getting a bit yippy’ has delivered in spades with the major indexes recording historic jumps. The Nasdaq rose 12 per cent, its best day in 24 years.

A television displays financial news on the floor at the New York Stock Exchange in New York.

US stocks rocketed higher with the tech-heavy Nasdaq recording its best day since 2001 after US President Donald Trump jolted investors with an announcement that he had authorised a 90-day pause on certain tariffs to most countries.

The about-face in the expanding trade war by its main actor jolted investors who had previously been fleeing for the sidelines.

The tech-heavy Nasdaq roared 12 per cent, its best day in 24 years. The S&P 500 added 9.5 per cent in its biggest gain since 2008, while the Dow Jones Industrial Average moved ahead 7.9 per cent, its biggest day since 2020. The 2,963 point rally in the blue-chip index was its largest point-gain on record, according to Dow Jones Market Data.

Trump talked up the market rally. “Who would have thought we would have a record like that?” Trump said in the Oval Office Wednesday afternoon. “The geniuses of the world get it.”

The moves started shortly after 1 pm in New York, when the president’s post on Truth Social lifted all three major indexes in minutes.

“More than 75 Countries” Trump wrote, “have called to negotiate a solution..and have not, at my strong suggestion, retaliated in any way, shape, or form.”

Because of that, he wrote, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”

President Trump said that he decided to pause the bulk of his reciprocal tariff program because of growing concern about the economy. “They were getting yippy,” Trump said when asked why he enacted a temporary rollback. “They were getting a little bit yippy, a little bit afraid.”

“Nothing is over yet,” Trump said, adding that “somebody” needed to take the steps that he took. He touted that lots of countries have come forward to make deals with the U.S. – including China, which remains subject to steep tariffs.

That decision, delivered by Trump’s social media account also triggered angry reactions as US Trade Representative Jamieson Greer was testifying in front of the House Ways and Means Committee.

Steven Horsford pressed Greer on the decision. “Are you aware the tariffs have been paused?” Horsford asked. “I am, yes,” said Greer. “I understand the decision was made a few minutes ago. It’s been under discussion.” Horsford grew angry. “WTF. Who’s in charge?”

“The president of the United States is in charge,” said Greer.

Horsford came back at him. “This is amateur hour. It needs to stop. How are you in charge of negotiations if the president is tweeting about this from wherever the hell he is?”

Trump’s tariff announcement came after a White House meeting that featured Secretary of Commerce Howard Lutnick and Treasury Secretary Scott Bessent, but notably not Greer. That sparked a bout of sympathy from Tom Suozzi , who noted that “the president made this switch-a-roo while you’re here testifying,” adding, “I actually feel bad for you.”

On Wednesday, Beijing said it would raise levies on U.S. imports to 84 per cent, from 34 per cent. In a social-media post, Trump wrote that he had raised the tariff imposed on China to 125 per cent, “effective immediately.”

Also under scrutiny was the selloff in US Treasurys. The yield on the 10-year note, the reference point for trillions of dollars in loans and securities, rose as high as 4.47 per cent Wednesday before retreating somewhat after the 10-year Treasury note auction was met by strong demand.

“The bond market right now is beautiful,” Trump said, talking to reporters at the White House. “I saw last night where people were getting a little queasy.”

There is is still broad nervousness about holding longer-term Treasurys ahead of government auctions Wednesday and Thursday. That anxiety contributed to a global stock selloff, with Japanese equities falling 3.9 per cent and Europe’s main benchmark down nearly 3 per cent.

Trump said Tuesday that levies on pharmaceutical imports will be announced “very shortly.”

Mark Hackett, chief market strategist at Nationwide said: “The 90-day pause is an encouraging sign that negotiations with most countries have been productive. It also injects some much-needed stability into a market rattled by uncertainty.”

“This is the pivotal moment we’ve been waiting for. The immediate market reaction has been overwhelmingly positive, as investors interpret this as a step toward much-needed clarity,” said Gina Bolvin, president of Bolvin Wealth Management Group.

“While a recession is not off the table, the likelihood has diminished from where it was as early as this morning before the 90-day pause was announced,” said Chris Brigati, chief investment officer of SWBC.

Earlier, Trump counseled cool and Treasury Secretary Scott Bessent told bankers “we are in pretty good shape” on the economy. Earlier, JPMorgan chief Jamie Dimon had said the economy was likely headed for a recession.

A screen displays news about trade between the United States and China, at the NASDAQ MarketSite in Times Square.

Also, pharma tariffs are still coming. Pharma stocks such as Merck and Pfizer were down 3 per cent early Wednesday.

The Magnificent Seven tech stocks gained more than $US1.8 trillion in market value, a record. Nvidia led the way with a $US440bn market value gain as its stock rose 19 per cent. Elon Musk’s Tesla soared 23 per cent, Apple and Meta Platforms added 15 per cent.

Gold prices jumped in their best day since 2023, rising above $US3000 per ounce.

Brent crude futures, the benchmark for international oil prices, fell to a roughly four-year low, a sign of stress in markets and fear the economic outlook is dimming.

Goldman Sachs threw out its previous prediction that the economy would fall into a recession.

Earlier, Japan’s top currency diplomat pledged to ensure stability in the global financial system, saying Tokyo will coordinate with other nations on how to handle US tariffs.

Dow Jones