Latest News

US stocks soar, dollar gains in dramatic rally of relief as Trump pauses his tariffs

The S&P 500 recorded its biggest gain in a single day since 2008. Meanwhile, the dollar rose and Treasuries reversed their losses after U.S. president Donald Trump announced a temporary U.S. tariff pause.

Trump's announcement came after a day of turmoil on the markets. Bond prices and the dollar had fallen earlier that morning amid fears the Trump administration would raise tariffs up to levels not seen in more than 100-years, which could push the economy into a recession. The president announced a 90-day pause on tariffs for many countries, even though he increased the levy of 125% on Chinese imports.

The market was relieved by the news that there would be a break. The S&P 500 closed 9.5% higher while the Nasdaq gained 12.2%, its largest one-day gain in history and second-largest ever. Investors said that uncertainty about tariffs on a longer-term basis continued.

Gina Bolvin of Bolvin Wealth Management Group, Boston, said: "This is a pivotal moment that we have been waiting for." The timing could not be better as it coincides with the beginning of earnings season.

Bolvin said that "However uncertainty remains over what will happen after the 90-day window, leaving investors to deal with possible volatility in the future."

The next U.S. quarter will provide more insight into the health and performance of American corporations. Several U.S. financial institutions, including JPMorgan Chase are due to release their results on Friday.

The benchmark 10-year Treasury price also reduced its earlier losses, after the U.S. Treasury Department witnessed strong demand for the notes in an afternoon auction.

The yield on the benchmark 10-year U.S. notes increased by 6.8 basis points, to 4.328%. Prior to that, it had reached a high of 4.515% - the highest since 20 February. Bond yields are opposite bond prices.

The sharp drop in Treasury bond prices and the reports of large-scale liquidations have raised concerns over deteriorating liquidity on the market.

Before Trump's announcement, the dollar was lower.

The selling of U.S. assets has been widespread and deep since Trump announced sweeping tariffs in April. Deutsche Bank analysts said in a Wednesday note that "the market has lost trust" in them, and the world is entering uncharted financial territory.

The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) rose by 0.25%, reaching 103.03; the euro fell 0.08%, at $1.0947.

The dollar gained 1.04% against the Japanese yen and 1.01% against the Swiss Franc.

U.S. stock prices extended their gains after Trump's announcement.

The Dow Jones Industrial Average rose by 2,962.86 or 7.87% to 40,608.45. The S&P 500 gained 474.13 or 9.52% to 5,456.90. And the Nasdaq Composite gained 1,857.06 or 12.16 % to 17,124.97.

MSCI's global stock index rose 42.32, or 5.70%, to 785.28. The pan-European STOXX 600 ended the day down 3.5%.

The news about tariffs also caused oil prices to rise.

Brent futures gained $2.66 or 4.23% to settle at $65 a barrel. U.S. West Texas Intermediate Crude Futures rose $2.77 or 4.65% to $62.35.

(source: Reuters)