US 90-day tariff pause sets off furious rally
By Alexander Bueso
Date: Thursday 10 Apr 2025
(Sharecast News) - The White House hit pause on its 'reciprocal tariffs' for all countries - save China - setting off a furious rally on Wall Street.
On Thursday afternoon, the US President, Donald Trump, said that such tariffs would be postponed for 90 days, while negotiations took place.
However, a 10% base tariff, which had already kicked into effect, was kept in place.
"There is of course, a sting in the tail. China faces higher tariffs in response as Trump continues to target his geopolitical rival," said IG chief market analyst Chris Beauchamp in an instant reaction.
"Whether this was part of a grand plan is to be debated, but it certainly looks like the US president has made some progress in reorienting the global trading system back towards the US and away from China."
By the end of trading in New York, the S&P 500 had run up by 9.52% to 5,456.90, while the Nasdaq-100 surged 12.16% to 17,124.97.
Significantly, the VIX index, which is known to many as Wall Street's fear gauge, plummeted by 35.75% to 33.62.
Ten-year US government bond yields meanwhile fell back, as did the euro, but crude oil futures also caught a bid.
Further commenting on the situation, overnight Stephen Innes at SPI Asset Management told clients: "The reaction across trading floors was instant - and euphoric. Champagne popped, risk screens lit up green, and it felt like everyone exhaled at once for a hot minute. But after the high-fives came the hangover question: Now what?
"Because the game has changed.
"We're no longer dealing with a tariff tantrum - this is full-blown global economic realignment. Call it what it is: Axis vs Allies 2.0, and the gloves are off."
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