Trump's Suspension of Tariffs Triggers Surge in US Stocks, Nasdaq Posts Largest Single-Day Gain Since 2001

According to the Zhitong Finance APP, U.S. President Trump publicly praised the strong rebound of the stock market on Wednesday after announcing a 90-day suspension of "retaliatory tariffs" on most goods above 10%. He stated at an event outside the White House, "Geniuses around the world understand this, our country is very strong. Everyone wants to reach an agreement."

When asked why senior White House advisors had previously stated there was no room for negotiation, Trump responded, "Many times, before negotiations, it is not a negotiation. For the past 35 years, we have been exploited by almost everyone."

A White House official later clarified Trump's announced tariff suspension policy: the 10% baseline tariff that will take effect on April 5 still applies to all trading partners, including the European Union. Although the EU has not yet imposed retaliatory tariffs on the U.S., it is still subject to the 10% tariff; the "reciprocal tariffs" above 10% are suspended for 90 days, except for China, whose goods' tariff rate has been raised to 125% and takes effect immediately; tariffs on steel, aluminum, and automobiles imposed under Section 232 remain unchanged; tariffs imposed on Canada and Mexico due to fentanyl-related executive orders also remain unchanged: 25% on goods outside the scope of the United States-Mexico-Canada Agreement (USMCA), and 10% on energy and potassium fertilizers; the 10% baseline tariff does not apply to Canada and Mexico.

Trump stated that the decision to suspend some tariffs was due to his observation that "people in the market are a bit overreacting," saying, "I feel that people are a bit 'hyped up,' a bit uneasy." He called it a "temporary measure to calm everyone down."

This sudden announcement triggered a strong market reaction, with the Dow Jones Industrial Average rising 7.87%, the largest single-day increase since March 24, 2020. The S&P 500 index rose 9.52%, the largest single-day increase since October 28, 2008. The Nasdaq rose 12.16%, the largest single-day increase since January 3, 2001, and the second-largest increase in history. The Russell 2000 index rose 8.66%, the largest single-day increase since March 24, 2020.

However, it seems that the market volatility prompting Trump's policy shift was not the stock market but the bond market. He told reporters, "The bond market is very delicate, I have been watching it. Last night I saw that people were a bit uneasy about the bond market. But now, the bond market looks beautiful." Although the market strengthened in the short term, uncertainty regarding tariff policies has not been completely eliminated.

The previously announced tariffs on steel, aluminum, and automobiles remain in effect, while goods imported from the EU remain at the 10% baseline rate, as the EU's retaliatory tariffs have not yet been implemented. Most non-USMCA goods from Mexico and Canada remain at a 25% tariff level.

When asked if he would consider tariff exemptions for certain U.S. companies that have been significantly impacted in the stock market, Trump responded, "We will consider it. Some companies are indeed more affected, while others are more susceptible due to the nature of their business. We will evaluate gradually."