U.S. stock markets staged one of their most dramatic rallies in years on Wednesday, April 9, 2025, after President Donald Trump announced a 90-day pause on most of the sweeping “reciprocal” tariffs that had rattled Wall Street just days earlier. The move marked a partial reversal of an aggressive trade strategy that had already begun to cause significant market and economic disruption. However, China was notably excluded from the tariff pause, with new import taxes on Chinese goods raised to a staggering 125%, adding fuel to an already heated trade standoff between the world’s two largest economies.
The market’s reaction was immediate and euphoric. The Dow Jones Industrial Average soared 2,963 points, or 7.87%, while the S&P 500 surged 9.52%—its best single-day performance since the 2008 financial crisis and the third-best day since the index’s creation in 1957. The tech-heavy Nasdaq soared 12.16%, making it one of the biggest one-day picks up in its history. Major enterprises saw enormous bounce back in their stock costs, counting Apple (+15.33%), Tesla (+22.69%), Nvidia (+18.72%), and Amazon (+11.98%). Airline stocks, which had suffered amid concerns over supply chain instability and fuel costs, also staged a stunning comeback. United Airlines jumped 26.14%, Delta climbed 23.38%, and American Airlines rose 22.6%.
The White House clarified that tariffs would be lowered to a flat 10% on countries that had agreed to enter trade talks, a move that helped calm investor fears. The decision came less than 24 hours after the most recent round of tariffs—some of which imposed levies as high as 46% on goods from Vietnam—had officially gone into effect. Wall Street had reacted harshly, with the S&P 500 plunging more than 10% in the days leading up to Trump’s pivot. Economists warned that the sudden escalation in tariffs had pushed the U.S. economy closer to recession, with global ripple effects already visible across bond markets and international exchanges.
Global markets had a mixed response to the volatility. Japan’s Nikkei closed down 4%, whereas South Korea’s Kospi fell into bear showcase region after a 20% drop from its past top. European markets also stumbled, with France’s CAC, Germany’s DAX, and the U.K.’s FTSE 100 all down more than 3%. However, the U.S. rally reversed much of the day’s losses by market close, signaling renewed—but cautious—optimism. Oil prices, which had dropped to their lowest since 2021 on fears of a demand slowdown, bounced back sharply. U.S. crude rose 4.65% to $62.35 per barrel, and Brent crude climbed 4.23% to $65.48. Gold, a traditional safe haven, jumped more than 3%, reflecting lingering investor anxiety.
In the bond market, however, the mood remained unsettled. U.S. Treasury yields, which typically drop when investors seek safety, instead surged indicating a major sell-off. The benchmark 10-year abdicate bounced over 4.3%, up from underneath 4% prior in the week. Analysts viewed this as a sign of mounting nervousness, not just about U.S. economic policy, but about the country’s long-term fiscal credibility. Some economists warned that if trade tensions persist, especially with China, foreign holders of U.S. debt could begin reducing their holdings—potentially driving up borrowing costs for the federal government.
In spite of the rally, markets stay underneath their levels from prior in the month. The S&P 500 is still down more than 3% from its near on April 2, and the Nasdaq is down generally 2.7%. Wednesday’s picks up, whereas noteworthy, were as much a inversion of freeze as they were a sign of certainty. “The market’s move upward is savage and talks to how severely the showcase was looking for clarity on this issue,” said Chris Brigati, chief venture officer at SWBC in Texas. “But the fundamental concerns haven’t gone absent.”
Trump’s decision came under rising pressure from both political allies and high-profile business leaders, including Tesla CEO Elon Musk, hedge fund billionaire Bill Ackman, and Barstool Sports founder Dave Portnoy. Ackman had publicly called for a 90-day tariff pause and, after the announcement, praised the president on social media, writing: “Thank you on behalf of all Americans.” Behind the scenes, financial institutions such as Goldman Sachs scrambled to revise their forecasts. Just hours before Trump’s announcement, the bank had warned of a likely U.S. recession. Two hours later, it walked back the statement—though it still projected minimal growth and pegged the chance of a 2025 recession at 45%.
Yet, the biggest economic wildcard remains China. The country accounted for more than $400 billion in U.S. imports last year and remains a vital supplier of goods, including an estimated 60% of all footwear and more than a third of all apparel sold in the U.S., according to the American Apparel and Footwear Association. The 125% tariff on Chinese products is the highest in decades and will directly impact consumer prices in the coming months. The National Retail Federation already warned that imports to U.S. ports could be down as much as 20% in May from a year ago because of increased costs and uncertainty.
In remarks after the announcement, Trump hinted at flexibility. He said he hoped to strike a deal with China and was open to granting exemptions for individual companies—an approach that marks a shift from his earlier “America First” hardline stance. “I saw last night where people were getting a little queasy,” Trump said, referring to market volatility. Still, he reaffirmed his commitment to strategic tariffs on key industries such as steel, aluminum, cars, and pharmaceuticals.
The CBOE Volatility Index (VIX), known as Wall Street’s “fear gauge,” reflected the rollercoaster nature of the week. It fell more than 35% on Wednesday after briefly soaring past 50 points earlier in the day—territory typically associated with major financial crises, like the COVID-19 panic or the 2008 meltdown. The index’s drop suggested that investor anxiety had temporarily eased, though volatility remained well above historical norms.
Trump’s tariff reprieve surprise gave Wall Street the clarity it was thirsting for, launching the market to a record bounce. But the economic outlook beyond that remains under a cloud of geopolitical uncertainty, especially with China. With the 90-day countdown now starting, investors, business, and foreign governments will be watching to determine whether this is the start of a substantive de-escalation or merely the eye in the storm.