The U.S. stock market experienced a dramatic turnaround as the Dow Jones Industrial Average soared by 2,600 points, marking its largest single-day gain in five years.
This surge, accompanied by an 8% rise in the S&P 500 and a 9.9% jump in the Nasdaq Composite, came after President Donald Trump announced a 90-day pause on certain tariffs, easing fears of an escalating global trade war.
The announcement, detailed in multiple news reports, provided a much-needed reprieve for investors following a tumultuous period of market volatility driven by tariff-related uncertainty.
According to CNBC, Trump revealed the pause via his Truth Social platform, stating, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
However, he simultaneously raised tariffs on China to 125%, a move clarified by Treasury Secretary Scott Bessent, who noted that all countries except China would revert to a 10% baseline tariff rate during the pause.
This decision followed a four-day market rout that saw the Dow lose over 4,500 points and the S&P 500 drop 12%, as reported by CNBC.
The pause, excluding sector-specific tariffs, was seen as a strategic pivot to allow negotiations with trading partners, with Bessent emphasizing that “each one of those is going to be separate, bespoke negotiation.”
The market’s reaction was swift and decisive. Reuters reported that U.S. stocks jumped sharply on April 9, with the Dow climbing 2,400 points in early trading—a figure slightly lower than CNBC’s final tally of 2,660 points—highlighting the rally’s intensity.
The relief stemmed from the alleviation of immediate trade war pressures, which had rattled investors since Trump’s initial tariff announcements earlier in the month.
NPR had previously noted on April 4 that the Dow plunged 2,200 points amid fears of a global economic upheaval, with investors, businesses, and consumers “terrified” of the potential fallout from Trump’s aggressive trade policies.
The pause offered a stark contrast to this earlier panic, restoring confidence at least temporarily.
Analysts provided mixed interpretations of the rally’s significance. Sam Stovall, chief investment strategist at CFRA Research, told CNBC, “This allows for at least a near-term rally, but I would not assume that the bottom has been put in place.”
His caution reflected a broader sentiment that while the pause was a positive development, underlying trade tensions—particularly with China, which announced retaliatory tariffs of 84% on U.S. goods—remained unresolved.
Sky News reported on April 9 that Trump’s decision to freeze tariffs at 10% for most countries while escalating them against China to 125% underscored the ongoing U.S.-China trade war, with more than 75 countries reportedly reaching out to negotiate terms.
The rally wasn’t without its complexities. The New York Times had warned on April 3 that Trump’s earlier tariff onslaught triggered a 5% drop in the S&P 500—the worst since June 2020—prompting criticism from allies and adversaries alike.
The subsequent pause, while a relief, did little to address long-term concerns about inflation and economic stability.
CNN Business noted on April 3 that JPMorgan analysts estimated Trump’s initial tariff plans could hike U.S. taxes by $660 billion annually and add 2% to the Consumer Price Index, potentially pushing the economy toward recession if fully implemented.
The 90-day pause, therefore, was seen by some as a tactical retreat rather than a resolution.
Global markets also felt the ripple effects. CNBC highlighted that prior to the announcement, stocks trended higher as traders anticipated relief, bolstered by Bessent’s role in tariff talks and Trump’s encouragement to investors that it was “a great time to buy.”
Meanwhile, the benchmark 10-year Treasury note yield rose 12 basis points to 4.374% on April 9, signaling shifting expectations about economic growth, though market watchers like Gregory Faranello of AmeriVet Securities expressed alarm at the bond market’s volatility.
