Stock markets rallied on Wednesday following news that President Donald Trump would postpone a controversial reciprocal tariff arrangement on dozens of foreign countries.
The Dow Jones Industrial Average gained 2,962 points to close up 7.87%, regaining more than half of its losses over the last week. The S&P 500 closed up 9.06% and the Nasdaq was up 12.61%.
The recovery was pronounced for travel stocks, US automakers and tech companies that depend on international supply chains for products like phones and computers. Tesla shares were up 22.96%, Apple climbed 15.33% and some airline companies like United Airlines saw gains of more than 20%.
The days of market whiplash followed President Trump's announcements of sweeping global tariffs on most imports to the U.S., including a baseline 10% tariff on dozens of countries, a 25% tariff on foreign-made automobiles imported to the U.S. and a 25% steel and aluminum tariff announced in February.
The moves also triggered retaliatory tariffs from Canada, China and the European Union.
But President Trump announced Wednesday that he would pause the reciprocal tariffs for 90 days, with the exclusion of those on China.
"People were getting yippy," he told reporters Wednesday afternoon in brief comments.
"Somebody had to pull the trigger," the president said of the new tariffs. "I was willing to pull the trigger."
President Trump said he had considered the 90-day delay as a way to aid trade negotiations.
"You have to have flexibility to do it right, and that's what we have. We brought everybody to the table," he said.
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The U.S. began collecting reciprocal tariffs on imports from 86 different countries earlier on Wednesday. The most notable of the tariffs was a 104% duty being imposed on goods being imported from China. Previously, President Trump had set a 20% tariff on goods from China. Tariffs on China remain in place and have in fact increased to 125%.
Trade experts have warned a sustained trade war between the two economies could intensify global economic effects. World Trade Organization Director-General Ngozi Okonjo-Iweala said in a Wednesday statement that such a confrontation could make global trade more fragile and lead to a reduction in global GDP.
White House Press Secretary Karoline Leavitt confirmed that some other tariffs would remain in place, including a 10% levy on many items entering the U.S. The U.S. is also keeping a 25% tariff on steel and aluminum imports.
