Agencies
New York
Wall Street’s main indexes soared on Wednesday, with the S&P 500 up more than 8 percent, after US President Donald Trump declared a 90-day tariff pause for many countries, effective immediately, bringing relief to investors worried about the global economic impact of US trade policies.
Trump declared the pause on a set of broad tariffs, while raising duties to 125 percent for China.
China had imposed a levy of 84 percent on all US goods starting April 10, up from the 34 percent previously announced, after US levies of 104 percent on Chinese goods went into effect.
While Trump’s announcement still left investors with uncertainty about the ultimate tariff policy, traders went shopping for beaten-down stocks. Since Trump announced broad tariffs late on April 2, stocks had fallen more than 12 percent, for their biggest four-day selloff in five years.
“Markets had been looking for a reason to rally for a few days. Markets can only sustain extreme conditions for so long before exhaustion sets in, rather like a toddler and a tantrum,” said Carol Schleif, chief market strategist at BMO Private Wealth in Minneapolis.
“The 90-day suspension does allow nice breathing room to allow negotiation to settle in and market valuations have clearly been reset. Yet the uncertainty for companies remains.”
At 2:32 p.m. (1832 GMT) the Dow Jones Industrial Average rose 2,736.95 points, or 7.27 percent, to 40,382.54, the S&P 500 gained 424.20 points, or 8.51 percent, to 5,406.97 and the Nasdaq Composite gained 1,650.52 points, or 10.77 percent, to 16,912.34 points.
All 11 of the S&P 500’s major industry indexes were higher after the news, with technology up 11.85 percent. Utilities was the slowest gainer, up 2.69 percent.
Large technology stocks provided the biggest boost, with Nvidia up 15 percent and Apple rising more than 9 percent.
“The reflex to buy the dip is very strong and certainly the wipeout you’ve seen in tech stocks makes them cheap relative to where they were,” said Chris Beauchamp, chief strategist at IG.
The US Treasury’s $39-billion 10-year note auction came in within market expectations, priced at a high yield of 4.435 percent, lower than the rate forecast at the bid deadline, suggesting solid investor demand.
