Markets rally after President Trump’s surprise move to ease global trade tensions, sparking historic gains on Wall Street and beyond
Washington, D.C. – April 10, 2025 — Investors in U.S. equities saw a staggering $4.8 trillion surge in market capitalization on Wednesday, following President Donald Trump’s surprise announcement of a 90-day reciprocal tariff pause for all trading partners—excluding China. The move marked a dramatic shift in U.S. trade policy and triggered one of the most significant single-day rallies in stock market history.
Trump’s announcement, made during an impromptu press briefing at the White House, aimed to de-escalate mounting trade tensions and inject confidence into financial markets that had endured several consecutive days of declines. The president emphasized that the pause was designed to give room for renewed trade negotiations and reduce inflationary pressures, but explicitly excluded China, citing “unfair trade practices” as the reason.
“This is a time to stabilize markets and show leadership,” Trump said. “We are extending a hand to our partners, but China will continue to face the consequences of its trade abuses.”
Market Rebound: A Historic Turnaround
Within hours of the announcement, markets roared back to life. The S&P 500 jumped 8.9%, the Nasdaq Composite rallied by 11%, and the Dow Jones Industrial Average soared 2,756 points, or 7.2%, ending a turbulent week with a powerful recovery.
Data from Dow Jones confirmed that U.S. stocks collectively added $4.8 trillion in market value by the close of trading Wednesday, marking one of the largest single-day rebounds in American financial history.
“The market was hungry for a positive catalyst, and this policy shift delivered exactly that,” said Lindsey Morris, chief strategist at Franklin Global Investments. “It signals to investors that the White House is listening to market sentiment and is willing to recalibrate when necessary.”
The announcement came after several weeks of anxiety in global markets, fueled by rising interest rates, slowing corporate earnings, and escalating trade conflicts—particularly with China. Wall Street analysts had warned that continued tariff hikes could accelerate the risk of a global recession.
Goldman Sachs Reverses Recession Call
In a swift reaction to the dramatic rally, Goldman Sachs Chief Economist Jan Hatzius reversed the firm’s previous forecast that placed a U.S. recession as its baseline scenario. Hatzius said the updated projections now show 0.5% gross domestic product (GDP) growth for the fourth quarter of 2025, with the likelihood of a recession reduced to 45%.
“This tariff pause changes the landscape,” Hatzius said in a client note. “It increases the probability of a soft landing and gives both fiscal and monetary policy more breathing room.”
Goldman’s revision mirrors a broader reevaluation among economists, many of whom had warned that prolonged trade disruptions could suppress consumer confidence and corporate investment.
Global Ripple Effect: Asia Markets Surge
The positive momentum wasn’t limited to the United States. Asian markets responded with sharp gains in early Thursday trading as investors priced in reduced trade risk and renewed investor confidence.
Japan’s Nikkei 225 index opened 7% higher, while South Korea’s KOSPI surged 5%. The Shanghai Composite rose by 0.6% to cross the 3,200 mark, and the tech-heavy Shenzhen Component Index jumped 3.2% to reach 9,840 points.
“The sentiment shift is immediate and global,” said Kang Yu-Min, a senior analyst at Korea Investment & Securities. “Investors across Asia are recalibrating expectations now that a major source of uncertainty has been lifted—at least temporarily.”
However, the Chinese yuan fell to its lowest level against the U.S. dollar in 17 years, reflecting growing investor concerns over the deepening trade standoff between Washington and Beijing.
China Targeted with Increased Tariffs
Despite the broad tariff pause, China remains a central focus of Washington’s trade crackdown. Earlier Wednesday, the Trump administration confirmed the implementation of a new 104% tariff on Chinese imports. Hours later, Beijing retaliated with an 84% tariff on U.S. goods, escalating the already tense standoff.
But in a striking development later that same day, the White House announced that tariffs on Chinese goods would be increased further—to 125%—while maintaining the 90-day pause for all other nations.
The exclusion of China from the tariff pause sends a clear signal, analysts say, that the U.S. intends to isolate China economically while strengthening alliances elsewhere.
“Trump is playing a dual strategy: appease the markets and allies, while doubling down on China,” said Dr. Eleanor Smith, a global trade policy expert at Georgetown University. “It’s a high-risk, high-reward maneuver.”
Beijing’s Measured Response
In response, Chinese authorities have vowed not to escalate the trade war further, even as they condemned the latest U.S. tariffs as “unjust and damaging to global commerce.”
“We will not double down,” said Chinese Commerce Ministry spokesperson Li Jian. “China seeks stability and cooperation, but we will defend our economic interests with firmness.”
While Beijing’s restrained tone may help avoid immediate market volatility, many economists believe the growing divide between the world’s two largest economies may have long-term repercussions on global supply chains and investment flows.
Looking Ahead: Market Caution Despite Optimism
Although the U.S. markets have rallied, experts caution that volatility could return if trade negotiations with China remain unresolved or if inflation data shows limited improvement.
Investors are now closely watching the Federal Reserve for clues on interest rate direction and are awaiting economic data that could either validate or challenge the newfound optimism.
“The relief is real, but so are the risks,” said Brian Collins, portfolio manager at Sentry Asset Management. “We’re not out of the woods yet, especially with China still firmly in Washington’s crosshairs.”
Still, Wednesday’s rally may mark a turning point, not just for the markets, but for the trajectory of U.S. trade policy heading into a pivotal election year.
