NEW YORK (AP) — Stock prices surged on Wednesday to achieve their biggest single-day gain since October 2008 and, overall, one of their best days since World War II after President Donald Trump announced the suspension of tariffs on most other nations, as investors had eagerly anticipated.
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The S&P 500 surged 9.5% on Wednesday. It had been down during the session due to concerns that Trump’s trade war could drag the global economy into a recession. But then came the social media post that investors around the world were waiting and hoping for.
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“I have authorized a 90-day pause,” said Trump, after acknowledging more than 75 countries with which, he noted, trade negotiations have been initiated and they have not retaliated against his most recent tariff measures.
Treasury Secretary Scott Bessent later told reporters that Trump suspended his “reciprocal” tariff calls on most of the country’s major trading partners, but maintained a 10% tax on almost all global imports.
China was a major exception, after Trump indicated that tariffs on Beijing products would increase to 125%. This raises the possibility of new fluctuations in the future that could stun financial markets and serves as a warning that the trade war is not over.
How did Wall Street react to Trump’s announcement?
Stocks in the United States remain below the level they were at just a week ago, when Trump announced global tariffs on what he dubbed as the “Liberation Day”.
But at least on Wednesday, the focus on Wall Street was positive. The Dow Jones Industrial Average gained 2,962 points, or 7.9%. Meanwhile, the Nasdaq composite advanced 12.2%. The S&P 500 had its third best session since World War II.
Wednesday’s profits moved the S&P 500 away from the edge of what is known as a “bear market.” This is what professionals call it when a common 10% drop in U.S. stocks, which happens more or less every year, turns into a collapse of over 20%. The index is currently 11.2% below its all-time high.
At the forefront of the increases were the airlines and other stocks that need customers to feel confident enough to travel for work or vacation.
Delta Air Lines surged by 23.4%. Hours earlier, the company had withdrawn its financial forecasts for 2025 as the trade war disrupts expectations for business and domestic spending and depresses bookings across the travel sector.
Wall Street also received a boost from a relatively calm auction of Treasury certificates in the bond market. Previous jumps in Treasury yields had shaken the market, indicating increasing levels of stress.
Trump himself said on Wednesday that he had been “getting a little nervous” watching the bond market.
The trade war between the United States and China is escalating
The trade war has clearly not ended. Bessent and Trump have shown their anger towards China, which has been increasing its own tariffs on US products and announcing other countermeasures with each move Trump has made.
China previously said it would increase tariffs on US products to 84% on Thursday. “If the United States insists on continuing to escalate its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end,” the Ministry of Commerce stated.
Later, the United States Treasury Secretary said in a message directed to countries around the world, but perhaps specifically referring to China: “Do not retaliate, and you will be rewarded.”