Wall Street staged a historic rally on Wednesday (Thursday AEST), with the Dow Jones, S&P 500, and Nasdaq all posting their biggest single-day gains in years.
The surge came after United States President Donald Trump announced a 90-day pause on country-specific tariffs, setting a universal 10% tariff rate for all trade partners except China.
In a post on Truth Social, Trump declared: "based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately."
However, he also announced a sharp escalation in tariffs on China, stating: "I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable."
Markets responded with enthusiasm. The Dow Jones Industrial Average jumped 2,962.9 points, or 7.9%, to close at 40,608.5 — its largest percentage gain since March 2020. The S&P 500 rose by 474.1 points, or 9.5%, to 5,456.9, marking its strongest one-day rise since 2008. The Nasdaq Composite soared 1,857.1 points, or 12.2%, ending the session at 17,124.97, its biggest rally since January 2001.
The rebound was led by stocks most affected by the ongoing trade war. Apple and Nvidia surged more than 15.3% and nearly 18.7%, respectively. Walmart climbed 10%, while Tesla surged over 22.7% on the back of the announcement.
Trump also took to Truth Social earlier in the day to urge investor confidence: "THIS IS A GREAT TIME TO BUY!!! DJT."
Shares of Trump Media & Technology Group (DJT) surged more than 21% during the session, marking their best performance this year.
In an afternoon press conference, Trump addressed market concerns, saying, “I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid.”
In the bond market, the 10-year Treasury yield eased 0.6% to 4.735%, while the 2-year yield climbed 4.9% to 3.914%.
