NEW YORK – U.S. stocks are flying higher after President Donald Trump announced a 90-day pause on most of his tariffs, but raised his tax rate on Chinese imports to 125%.
The S&P 500 was up 5.7% after erasing an earlier loss of 0.7%. The Dow Jones Industrial Average soared 2,000 points, or 5%, and the Nasdaq composite was up 6.8%.
Treasury Secretary Scott Bessent told reporters that Trump was pausing his so-called ‘reciprocal’ tariffs on most of the country’s biggest trading partners, but maintaining his 10% tariff on nearly all global imports. Imports tariffs on goods from China, though, would surge to 125% “effective immediately” Trump said on social media.
It was seemingly an attempt to narrow what had been an unprecedented trade war between the U.S. and most of the world to one between the U.S. and China.
Investors have been desperate for Trump to ease up on his tariffs, which economists say could cause a global recession and increase inflation. But Trump also said that he’s raising tariffs on China, the world’s second-largest economy.
Huge swings have become routine for financial markets worldwide recently, not just day to day but hour to hour, as investors struggle to game out what Trump’s trade war will do to the economy. On Tuesday, the S&P 500 careened between a gain of 4% and a loss of 3% for a second straight day of shocking reversals.
