People work on the options floor at the New York Stock Exchange in New York, Tuesday, March 4, 2025. (AP Photo/Seth Wenig)
- President Donald Trump said he would temporarily back off on most of his global tariffs but also said that he was raising tariffs even higher against China, up to 125%.
NEW YORK (AP) — U.S. stocks are soaring on a euphoric Wall Street Wednesday after President Donald Trump said he would temporarily back off on most of his global tariffs, as investors had so desperately hoped he would.
The S&P 500 was up 8% in afternoon trading and heading toward one of its best days in decades. It had been down earlier in the morning amid worries about whether Trump’s trade war would drag the global economy into a recession. But then came the posting on social media from Trump that investors worldwide had been waiting and wishing for.
“I have authorized a 90 day PAUSE,” Trump said, after recognizing the more than 75 countries that he said have been negotiating on trade and had not retaliated against his latest increase in tariffs.
Treasury Secretary Scott Bessent later told reporters that Trump was pausing his so-called ‘reciprocal’ tariffs on most of the country’s biggest trading partners, but maintaining his 10% tariff on nearly all global imports.
The Dow Jones Industrial Average was up 2,665 points, or 7.1%, as of 2 p.m. Eastern time, and the Nasdaq composite was 10.3% higher.
Trump, though, also said that he was raising tariffs even higher against China, up to 125%. The world’s second-largest economy has been ratcheting up its own tariffs on U.S. goods and announcing other countermeasures with each move Trump has made.
“If the U.S. insists on further escalating 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 said earlier in the day.
Huge swings have become routine for financial markets worldwide recently, not just day to day but hour to hour, as investors struggle to game out what Trump’s trade war will do to the economy. On Tuesday, the S&P 500 careened between a gain of 4% and a loss of 3% for a second straight day of shocking reversals.
Wall Street also got a boost Wednesday from a relatively smooth auction of U.S. Treasurys. Earlier jumps in Treasury yields had rattled the market, indicating increasing levels of stress.
Analysts say several reasons could have been behind the move, including hedge funds and other investors having to sell their Treasury bonds to raise cash in order to make up for losses in the stock market. Investors outside the United States may also be selling their U.S. Treasurys because of the trade war. Such actions would push down prices for Treasurys, which in turn would push up their yields.
Regardless of the reasons behind it, higher yields on Treasurys add pressure on the stock market and push upward on rates for mortgages and other loans for U.S. households and businesses.
The moves were particularly notable because U.S. Treasury bonds have historically been seen as some of the safest possible investments, and their yields have tended to fall — not rise — during scary times for the market. This week’s sharp rise had brought the yield on the 10-year Treasury back to where it was in late February.
After approaching 4.50% in the morning, the yield on the 10-year Treasury pulled back to 4.39% following Trump’s pause and the Treasury’s auction. That’s still up from 4.26% late Tuesday and from just 4.01% at the end of last week.
In stock markets abroad, indexes tumbled across most of Europe and much of Asia.
London’s FTSE 100 dropped 2.9%, Tokyo’s Nikkei 225 sank 3.9% and the CAC 40 fell 3.3% in Paris.
Chinese stocks were an outlier, and indexes rose 0.7% in Hong Kong and 1.3% in Shanghai.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
