Following the nosedive seen over the past several sessions, stocks showed an astonishingly strong move back to the upside during trading on Wednesday. The major averages all moved sharply higher, posting their biggest one-day gains in years.
The major averages saw continued strength late in the day, reaching new highs for the session. The Nasdaq soared 1,857.06 or 12.2 percent to 17,124.97, the S&P 500 spiked by 474.13 points or 9.5 percent to 5,456.90 and the Dow surged 2,962.86 points or 7.9 percent to 40,608.45.
Stocks showed a lack of direction early in the day but skyrocketed after President Donald Trump announced a 90-day pause on new “reciprocal tariffs” on most countries to allow for negotiations.
White House press secretary Karoline Leavitt told reporters that tariffs would be brought down to a “universal 10 percent” level during the 90-day pause.
With the rally, the major averages offset a huge chunk of the nosedive seen in the days after Trump initially announced the new tariffs last Wednesday.
“The stock market rebound is a combination of speculative investors needing to cover short positions; less fear of recession and stagflation; and optimism that tariff rates will ultimately end up lower than they are threatened today,” said Bill Adams, Chief Economist for Comerica Bank.
However, the pause will not apply to China, as Trump announced he is raising the tariff on the country to 125 percent due to the “lack of respect” they have shown to the world’s markets.
The higher tariffs on China come after the country retaliated to a previous increase by announcing it will raise its tariffs on U.S. goods to 84 percent from 34 percent just after midnight on Thursday.
In an earlier Truth Social post, Trump urged investors to “be cool,” claimed “everything is going to work out well” and called this a “great time to buy.”
Sector News
Semiconductor stocks skyrocketed in reaction to the latest tariff news, with the Philadelphia Semiconductor Index soaring by 18.7 percent after ending the previous session at its lowest closing level in over a year.
Substantial strength also emerged among airline stocks, as reflected by the 15.3 percent spike by the NYSE Arca Airline Index. The index bounced off a four-year closing low.
Oil service stocks also moved sharply higher amid a significant rebound by the price of crude oil, driving the Philadelphia Oil Service Index up by 12.9 percent.
Computer hardware, software and networking stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index plunged by 3.9 percent, while China’s Shanghai Composite Index shot up by 1.3 percent.
Meanwhile, the major European markets all moved sharply lower on the day. While the French CAC 40 Index dove by 3.3 percent, the German DAX Index tumbled by 3.0 percent and the U.K.’s FTSE 100 Index slumped by 2.9 percent.
In the bond market, treasuries extended the sharp pullback seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged 13.8 basis points to 4.400 percent.
Looking Ahead
Following several quiet days on the U.S. economic front, the Labor Department is due to release reports on consumer price inflation and weekly jobless claims on Thursday, although the data may be overshadowed by any tariff news.
Business News
U.S. Stocks Skyrocket As Trump Announces 90-Day Tariff Pause
2025-04-09 20:20:39
