Daily Fundamental Update: U.S. Stocks Skyrocket after Trump’s Temporary Pause on Tariffs
Key Takeaways
- Major US indices witness their best daily performance in years.
- Trump announces temporary pause on tariffs for 90 days.
- Oil rebounds from its four-year low on hope of avoiding global recession.
Trump announces pause on reciprocal tariffs for 90 days
Trump reduced reciprocal tariffs to a universal 10% rate for 90 days. Markets surged on the news, with Treasury Secretary Bessent claiming this was the intended strategy.
Trump’s pre-announcement social media posts hinted at the upcoming change, suggesting it was indeed planned.
However, investors should remain cautious. The 90-day pause is temporary, and such dramatic market rallies often occur during broader downturns. Market uncertainty persists as negotiations continue.
Historic gains for U.S. indices and Nikkei follows suit
Markets soared Wednesday in a historic rally. The S&P 500 jumped 9.52%, Dow rose 7.87%, and Nasdaq gained 12.16%. Trading volume hit an 18-year record high.
Japan’s Nikkei 225 led Asian gains Thursday. The index rose 8.83% to 34,508.62 breaking above 34,000 after six days.
European markets are expected to rise on Thursday after Trump’s tariff pause, following Wednesday’s 3.5% drop in the Stoxx 600.
While 90 countries benefited from reduced tariffs, China faced increased tariffs of 125% after raising their own tariffs to 84% in retaliation to Trump’s reciprocal tariffs. The EU also approved retaliatory measures against U.S. steel and aluminum tariffs.
China’s CPI numbers fall in March, but a slower pace
China’s consumer prices fell for a second month as deflation deepened amid escalating U.S. trade tensions. Consumer prices dropped 0.1% year-on-year in March, following February’s 0.7% decline, according to National Statistics Bureau data.
Producer prices fell 2.5% – their 29th straight monthly decline and steepest drop since November. Core inflation rose 0.5%.
Experts warn of widening price divergence as trade disruptions worsen. The U.S. just raised tariffs to 125%, while China retaliated with 84% duties.
