Wall Street's majestic rally: Trump's tariff hiatus reoriented the market

The US stock market witnessed a historic rally on April 9, 2025, following President Donald Trump's announcement of a 90-day tariff timeout for reciprocal tariffs by over 75 countries. This unexpected move brought relief to investors from the volatility in the market during the preceding weeks due to escalating trade tensions. This is what happened, why it matters, and what analysts are saying.

Historic advances for the big indexes

Wednesday's trading resulted in historic advances on the three big indexes:

S&P 500 rose 9.5%, finishing at 5,456.90—its third-biggest one-day advance since World War II.

Dow Jones Industrial Average rose 2,962 points (7.9%), its largest point gain in history.

Nasdaq Composite rose 12%, recording its second-best day in history.

Technology stocks led the way, with Nvidia advancing 18.7% and Apple advancing 15.3%. Airlines also enjoyed substantial advances—Delta Air Lines advancing 23%, and United Airlines advancing 21%.

LPL Financial's chief economist, Jeffrey Roach, described it as, "This rally is a result of pent-up demand in oversold sectors. Investors were eagerly waiting for trade policy clarity."

While hope existed, not all were affected equally. Tariffs on Chinese imports were raised to a record high of 125%, a sign of increased trade tensions with Beijing. That caused some investors to worry about long-term consequences.

What fueled the rally?

The driving force behind this market rally was Trump's decision to temporarily lift tariffs. The president lowered the duties to a uniform rate of 10% for all but most countries and increased tariffs against China—a gesture he defended as a reaction against China's "lack of respect" for world markets.

Trump posted on Truth Social, "I have instructed a 90-day halt to provide nations time to negotiate equitable resolutions. Time to buy! It is a great time to buy!" The tweet sparked investor optimism and created a buying rush in previously overbought stocks.

But they caution this relief will be temporary. Mohamed El-Erian, Allianz's chief economic advisor, warned, "The 90 days are a good step, but nobody knows what happens after that." ANZ's Kon G also likened the rally to universal short-covering and not by fundamentals in improving trade relations.

Adding to market nervousness was China's retaliatory counterattack—hiking tariffs on US imports to 84%. The action indicates the fluidity of global trade flows even in the face of temporary tariff truces.

What's next for investors?

Wednesday's rally was historic, but futures markets indicate volatility persists. S&P 500 futures dropped modestly by 0.3%, and Nasdaq futures dropped 0.1% Thursday morning.

Jamie Cox, a managing partner at Harris Financial Group, encapsulated the mood: "Trump taught us how whipsawy his tariff policy can be. Investors need to get ready for more whipsaws."

Asian markets also rebounded strongly following Wall Street’s lead:

• Japan’s Nikkei rose by 8.3%.
• South Korea’s Kospi gained over 5%.
• Taiwan’s Taiex surged by 9.2%, driven by tech giants like TSMC (+10%) and Foxconn (+9.8%).

Gold edged higher by 0.5%, reflecting cautious investor sentiment amid ongoing uncertainty. Analysts are now closely watching key economic data such as March’s consumer price index and weekly jobless claims to determine whether this rally signals sustainable growth or merely a temporary reprieve.

Mark Hackett from Nationwide warned investors to “avoid the temptation to chase momentum and keep emotions in check,” highlighting that volatility could persist until clearer trade resolutions emerge.

Uncertainty will remain a defining feature of the investment landscape as markets navigate the next steps in global trade negotiations.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.

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