tariff u-turn: how trump's 90-day pause sent stocks soaring

2025-04-09 general

new york, Wednesday, 9 April 2025.
president trump’s unexpected 90-day tariff pause triggered a massive market rally. the s&p 500 experienced one of its largest gains since world war ii. united airlines and microchip technology saw dramatic reversals. the nasdaq composite jumped a staggering 12.7%. delta air lines, however, cited tariff uncertainty as a reason for not reaffirming financial guidance. the trump administration also signaled a softening of restrictions on nvidia’s h20 chip sales to china, reflecting a balancing act between national security and economic realities.

market’s immediate reaction

The Dow Jones Industrial Average jumped significantly, surging 2,962.86 points, a 7.296 7.87% increase, to close at 40,608.45 [8]. This surge marked its largest one-day gain since March 2020 [8]. The S&P 500 spiked 9.52% to 5,456.90, its biggest single-session rise since 2008 [8]. The market’s violent upward move highlights how eagerly investors sought clarity on tariff policy, according to Chris Brigati, chief investment officer at i [1]. More than a dozen companies experienced reversals exceeding 20% from their lows to their highs during the rally [1].

winners and losers

Several sectors reacted strongly to the tariff news. On April 8, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) jumped more than 5% and 4%, respectively [7]. Humana’s stock surged 10.8% following an announcement of higher-than-expected government payments to Medicare Advantage plans [7]. Conversely, Wayfair shares closed 12% lower on Tuesday due to concerns about tariffs, specifically a potential 46% tariff on Vietnam [7]. Apple shares also fell 4.5% on Tuesday afternoon, with the stock down 21% over the last four trading sessions [7].

expert opinions and analysis

Experts are offering varied perspectives on the market’s response and future outlook. Treasury Secretary Scott Bessent stated the economy would “be back to firing on all cylinders” soon [4]. However, Bill Ackman, a hedge fund billionaire and Trump supporter, noted concerns, stating, “Our stock market is down. Bond yields are up and the dollar is declining. These are not the markers of successful policy” [4]. Ray Dalio voiced concerns about the negative effects of tariffs, saying costs would increase, revenue would decrease, and capital would be harder to obtain [7].

global market reactions

The tariff pause also impacted global markets. European stock markets closed higher on Tuesday, breaking a four-day losing streak [6]. The Stoxx 600 index closed 2.72% higher at 486.9 points [6]. France’s CAC 40 and Germany’s DAX were both up around 2.5%, and the U.K.’s FTSE 100 rose 2.7% [6]. However, China’s Commerce Ministry continues to voice strong opposition to escalating tariffs and promises countermeasures [6]. The ministry stated that the U.S. threat to escalate tariffs on China is a mistake on top of a mistake [6].

lingering uncertainties and cautions

Despite the market’s positive reaction, uncertainties persist. President Trump himself stated, “nothing’s over yet,” suggesting the potential for future policy shifts [4]. Russ Mould, investment director at AJ Bell, cautioned that it’s dangerous to assume a massive rally is guaranteed, given Trump’s unpredictable nature [6]. Joe Brusuelas, chief economist at RSM, warned that simultaneous shocks to consumer sentiment, corporate confidence, trade, financial markets, prices, new orders, and the labor market could trigger a recession this quarter [4]. Investors should remain vigilant, as the tariff situation remains fluid [alert! ‘Tariff situation is very fluid, and subject to change’] [4][6].

Bronnen

stock market trade policy