US stock markets jumped after President Donald Trump announced a 90-day pause on tariffs for several countries. He made the announcement on Wednesday afternoon. Earlier in the day, markets had dropped sharply. Investors feared that a major hike in tariffs would cause a recession. Bond prices fell. The US dollar also weakened. However, Trump’s decision quickly changed the market mood. He paused tariffs for many nations. At the same time, he raised duties on Chinese imports to 125%.
Markets Rebounded Strongly
As a result, the S&P 500 surged 9.5%. It was the biggest one-day gain since 2008. Meanwhile, the Nasdaq jumped 12.2%. That marked its largest rise since January 3, 2001, and its second-highest in history.
Despite the sharp rally, investors remained cautious. They were unsure about what would happen after the 90-day pause.
“This is the pivotal moment we’ve been waiting for,” said Gina Bolvin, president of Bolvin Wealth Management Group.
“The timing couldn’t be better, coinciding with the start of earnings season. However, uncertainty looms over what happens after the 90 days, leaving investors to grapple with potential volatility ahead,” she told Reuters.
Asian Markets Followed Wall Street
On Thursday, Asian markets followed Wall Street’s lead. Japan’s Nikkei index rose 8.24%. The broader Topix index climbed 7.33%.
Similarly, South Korea’s Kospi gained 4.8%. Its smaller Kosdaq index rose 4.2%. In addition, Australia’s S&P/ASX 200 went up by 5.09% in early trading.
China Faced Higher Tariffs
Although Trump paused tariffs for most countries, he raised them on China. The US hiked duties on Chinese goods to 125%. This move followed Beijing’s decision to impose an 84% tariff on American products.
Therefore, investors are closely watching how the Chinese market will react.
Dow Logged Its Biggest Gain Since 2020
Meanwhile, the Dow Jones Industrial Average recorded a massive jump. It gained 2,962.86 points, or 7.87%. It ended the day at 40,608.45. This marked its largest one-day percentage rise since March 2020.