Trump's Tariff Suspension Sparks Wall Street Rally

The announcement by U.S. President Donald Trump regarding the postponement of certain tariffs for select countries has led to a significant surge in the U.S. stock markets. On Wednesday, the major New York stock indices expanded their initial recovery gains in response to this news. By the close of trading, the Dow Jones Industrial Average had risen by 7.87% to reach 40,608.45 points. Meanwhile, the S&P 500 experienced its best trading day since 2008, gaining 9.52% to settle at 5,456.90 points. The Nasdaq Composite rose by an impressive 12.16%, reaching 17,124.97 points, marking its highest daily gain since 2001. This rally has largely offset the losses incurred over the preceding five days.

In addition to the stock market's upward trajectory, oil prices and Bitcoin also surged following the announcement. Bitcoin climbed above $81,000 on Wednesday evening, a notable increase from below $78,000 prior to Trump's remarks on U.S. tariff policy. However, the U.S. bond market continued to experience a sell-off, with the yield on ten-year U.S. Treasury bonds rising to 4.423% from 4.260% the previous day. Philippe Ferreira from wealth management firm Kepler Cheuvreux remarked that there are signs indicating a decline in the credibility and reliability of the U.S. as a trading partner. Conversely, gold, commonly seen as a safe haven, continued its upward trend, increasing by 2.3% to approximately $3,052 per ounce.

The uncertainty surrounding the tariff conflict instigated by Trump had previously led to a decline in stock markets. In response to the latest U.S. tariffs, China had retaliated with equivalent tariffs, resulting in both nations imposing additional duties that now total 125% on imports from China. The minutes from the March meeting of the U.S. Federal Reserve revealed that investors were largely unfazed. The Fed had already adopted a cautious approach leading up to the outbreak of the tariff dispute, which could involve keeping interest rates elevated amid persistent inflation or possibly lowering them in response to economic weakness.

Several individual stocks saw substantial gains, notably the luxury holding company Capri, which surged by 27%. Reports from the Financial Times indicated that the Italian fashion brand Prada is close to acquiring Versace from Capri for $1.4 billion. Retail giant Walmart also experienced a significant rise, with its shares climbing by 10% after the retailer reaffirmed its guidance for the current fiscal year, demonstrating resilience despite the ongoing global tariff disputes. Walmart CEO Doug McMillon stated that the company has learned how to navigate turbulent times.