Trump's 90-Day Tariff Pause Ripples Through Markets: What Wall Street Is Saying
Introduction
On April 10, 2025, President Donald Trump announced a 90-day pause on reciprocal tariffs for most countries—a move that sent shockwaves through global markets. While tariffs on China jumped to 125%, the temporary reprieve for other nations ignited a historic stock market rally, with the S&P 500 surging 9.5%, the Nasdaq rocketing 12%, and the Dow Jones leaping 7.8% (3,000 points) in a single day.
However, the celebration was short-lived. By Thursday morning, markets retreated 2% as investors digested lingering uncertainties. Wall Street strategists remain divided—some see relief, while others warn of continued volatility, inflation risks, and potential recession triggers.
The Market’s Explosive Reaction
1. Historic Single-Day Gains
- S&P 500 (^GSPC): +9.5% (Best day since 2020)
- Nasdaq (^IXIC): +12% (2nd-best day ever)
- Dow Jones (^DJI): +7.8% (3,000-point surge)
Only nine S&P 500 stocks closed lower, including Dollar General (DG, -1.9%) and Kroger (KR, -0.8%). Meanwhile, momentum stocks roared back:
- Tesla (TSLA): +22%
- Nvidia (NVDA): +18%
2. Why the Rally Fizzled
Despite the euphoria, markets dropped 2% in premarket trading Thursday due to:
⚠️ 10% baseline tariffs still in place
⚠️ China tariffs at 125% (hurting retailers like Walmart)
⚠️ Trump’s unpredictability ("Could reverse anytime")
Wall Street’s Split Verdict
1. The Optimists: "Worst-Case Averted"
Goldman Sachs reversed its recession warning, citing reduced near-term risks.
TD Securities expects Fed rate cuts by June to counter inflation (forecast: 4%).
2. The Skeptics: "Volatility Isn’t Over"
Citi warns China tariffs will squeeze retail profits, forcing price hikes.
JPMorgan still predicts a 2025 recession, citing $300B+ in existing tariffs.
3. The Realists: "Policy Whiplash Continues"
Jones Trading’s Mike O’Rourke:
"This is no way to manage an economy. Markets swing on one individual’s whims."
Gabelli Funds’ Chris Marangi:
"Investor confidence has dropped. We’re not returning to pre-tariff stability soon."
Key Stocks to Watch
1. Winners
- Tech (NVDA, TSLA): Benefited most from risk-on sentiment.
- Airlines (DAL): Tariff pause eases fuel-cost fears.
2. Losers
- Retail (WMT, DG): Still face 125% China tariffs on imports.
- Agriculture: Soybean futures dipped as China trade tensions linger.
What’s Next for Investors?
1. Fed Policy in Focus
- Expected cuts delayed to September (from June) as Fed waits for clarity.
- Inflation could hit 4%, keeping pressure on rates.
2. Critical Dates
- July 2025: Next tariff decision deadline.
- Q3 Earnings: Companies will reveal tariff impacts (e.g., Walmart, Apple).
3. How to Protect Your Portfolio
- Diversify: Balance tech with defensive stocks (utilities, healthcare).
- Watch China Exposure: Companies reliant on Chinese supply chains remain at risk.
- Hedge with Gold: Safe-haven demand may rise if volatility returns.
Conclusion: A Fragile Truce
- Trump’s tariff pause sparked a record rally but failed to erase long-term risks. While tech and cyclical stocks soared, retail and agriculture sectors still face China-related headwinds. Wall Street remains split—optimists see relief, pessimists brace for recession, and realists warn of ongoing policy whiplash.
- Investor Takeaway: Stay nimble. The next 90 days will test whether this is a turning point or just a temporary ceasefire in the trade war.
FAQ
- Q: Will the Fed cut rates in 2025?
A: Likely, but timing shifted from June to September due to tariff uncertainty. - Q: Which stocks benefit most from tariff pauses?
A: Tech (NVDA, TSLA), airlines (DAL), and automakers—all sensitive to trade tensions. - Q: Should I sell retail stocks?
A: Not necessarily, but companies heavily reliant on Chinese imports (WMT, DG) face higher costs. - Q: Is a recession still coming?
A: JPMorgan says yes, Goldman Sachs is less certain—monitor Q2 GDP data.