US stocks came soaring back on Wednesday, April 9, 2025, as President Trump announced a 90-day pause on tariffs for most countries while simultaneously raising tariffs on China. The major indices, including the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average, all surged sharply after the announcement, marking a dramatic turnaround for the markets.
The S&P 500 jumped nearly 8%, while the Nasdaq rose 10%, and the Dow soared over 7%, adding more than 2,500 points. This rally came after a volatile period in which investors had been bracing for further escalation in the trade war between the United States and China.
Market Movers:
- Nvidia (NVDA): Up approximately 13% following the tariff pause announcement. As a major player in the semiconductor industry, Nvidia's stock saw a boost amid hopes that lessening trade tensions would benefit tech companies reliant on international markets.
- Broadcom (AVGO): Also surged by 13%, benefiting from similar sentiments surrounding the easing of trade concerns. Broadcom, a leading chipmaker, saw its stock rally alongside other semiconductor names in the wake of the announcement.
- AMD (AMD) and Intel (INTC): Both stocks rose over 14%, reflecting the optimism in the tech sector. These companies, along with Nvidia and Broadcom, are crucial players in the semiconductor supply chain, which is sensitive to international trade dynamics.
- Walmart (WMT): Saw a notable rise of 9.99%. Despite concerns around the impact of tariffs on global retail, Walmart's resilience in adjusting to shifting trade policies buoyed its stock, as it maintained sales guidance while warning of potential profit growth slowdowns.
- Delta Air Lines (DAL): Saw an uptick in its stock as the broader market gained momentum, despite reporting stagnated revenue growth for Q1. The airline remains cautious about the potential impact of tariffs but was able to benefit from the market rally.
Sectors Surge Across the Board
The stock market rally wasn’t confined to individual stocks. Major sectors across the board saw significant gains. The Technology Select Sector Index (XLK) led the charge, up 10%, followed closely by Consumer Discretionary (XLY) and Materials (XLB). The positive market sentiment stemmed from the 90-day tariff pause, which provided some relief for companies in these sectors, particularly in technology and materials, both of which were grappling with uncertainties surrounding the trade war.
The technology sector's substantial gain was driven by chipmakers and other tech giants who stand to benefit from reduced tariff pressures on their goods and services. The Russell 2000, a key index of small-cap stocks, also surged by over 7%, reflecting optimism from smaller companies that had been struggling under the weight of tariff concerns.
Bond Market Remains Cautious
Despite the stock market’s rally, bond market investors remained wary. The yield on 10-year Treasuries continued to climb, reaching around 4.4% after paring some earlier gains. The increase in yields indicates that bond investors are still concerned about inflation, despite the positive stock market reaction. The surge in yields has been one of the most significant developments in the bond market this week, signaling that investors are pricing in the ongoing risks associated with President Trump's tariff policies.
Gold and Oil See Mixed Reactions
Gold, typically viewed as a safe-haven asset during times of uncertainty, saw its gains pared back after the tariff pause was announced. However, it still remained up by about 3% at midday, hovering near $3,080 per ounce. Oil prices, on the other hand, saw a significant rebound, with West Texas Intermediate (WTI) crude rising over 2.5%, trading above $61 per barrel. This increase was driven by the announcement that China, a major importer of US crude, would implement tariffs on US-made goods, further complicating the trade landscape. Despite this, the tariff pause seemed to ease broader fears in the market.
Looking Ahead
As the market reacts to the tariff pause, all eyes will now turn to upcoming economic data, particularly the release of the Consumer Price Index (CPI) later this week, which will provide insight into where inflation is headed amid the evolving trade policies. Investors will also be watching earnings season closely, as companies begin reporting their first-quarter results. Given the recent volatility, there is growing speculation that the market may have already priced in some of the negative impacts of the tariffs, especially with many companies already offering cautious guidance.
Investors are anxious to see how the Federal Reserve responds to the ongoing uncertainty. With the possibility of a global economic slowdown due to the trade war, any signs of a dovish stance from the Fed could provide further support to the market.