Traders work on the floor of the New York Stock Exchange (NYSE) on April 09, 2025 in New York City.Spencer Platt/Getty Images
U.S. stock markets rebounded Wednesday in one of their most furious rallies on record, as investors reacted with euphoria to news that President Donald Trump has implemented a 90-day pause on many of the tariffs slapped on trading partners.
The monster rally saw the S&P 500 closing up 9.5%, its largest one-day percentage gain since Oct. 28, 2008 during the global financial crisis. The Nasdaq gained 12.1%, its biggest advance since Jan. 3, 2001, during the dot-com market bubble. The blue chip Dow Jones Industrial Average rose 2,962 points, a rise of 7.8% and its largest point-gain in history, according to Dow Jones Market Data.
The TSX ended up 5.4%, its biggest advance since March 2020, shortly after the start of the pandemic.
“This is the pivotal moment we’ve been waiting for,” said Gina Bolvin, president of Bolvin Wealth Management Group in Boston. “The immediate market reaction has been overwhelmingly positive, as investors interpret this as a step toward much-needed clarity. The timing couldn’t be better, coinciding with the start of earnings season, which kicks off with the big banks this Friday.
“However, uncertainty looms over what happens after the 90-day period, leaving investors to grapple with potential volatility ahead,” she cautioned.
The rally, which broke U.S. records for most shares traded in a day, followed Wall Street’s biggest four-day percentage loss since the pandemic.
While Trump Wednesday afternoon announced he would temporarily pause heftier tariffs on dozens of countries less than 24 hours after they kicked in, the White House kept a 10% blanket duty on almost all U.S. imports. He had also raised the levy on Chinese imports earlier in the day to 125%. The increase in China tariffs was in retaliation for China’s announcement of an 84% levy on U.S. goods starting April 10.
Traders took the opportunity to shop for beaten-down stocks. Since Trump announced broad tariffs late on April 2, the S&P 500 had fallen more than 12%.
After Trump’s pause announcement, Goldman Sachs said it was rescinding its recession forecast and reverting to its previous baseline estimate for the economy to grow in 2025.
Kevin Gordon, senior investment strategist at Charles Schwab, said the rally from oversold levels made sense but cautioned that “to have a high conviction call on anything right now is a fool’s errand.”
“We just have to wait and see what the ultimate policy is, but unfortunately the policy changes almost on a daily basis,” said Gordon, adding he was concerned about companies’ ability to make spending and hiring decisions in such an environment.
Even with the rally, all three of Wall Street’s major averages and the S&P/TSX Composite Index ended the session below the April 2 close, the last trading day before Trump unveiled broad tariffs.
Sentiment on Wall Street also got a boost from a relatively smooth auction of U.S. Treasurys in the bond market Wednesday. Earlier jumps in Treasury yields had rattled the market, indicating increasing levels of stress. Trump himself said Wednesday that he had been watching the bond market “getting a little queasy.”
Analysts say several reasons could be behind the rise in yields, including hedge funds and other investors having to sell their Treasury bonds to raise cash in order to make up for losses in the stock market. Investors outside the United States may also be selling their U.S. Treasurys because of the trade war. Such actions would push down prices for Treasurys, which in turn would push up their yields.
The moves are particularly notable because U.S. Treasury yields have historically dropped — not risen — during scary times for the market because the bonds are usually seen as some of the safest possible investments. This week’s sharp rise had brought the yield on the 10-year Treasury back to where it was in late February.
After approaching 4.50% in the morning, the 10-year yield pulled back to 4.34% following Trump’s pause and the Treasury’s auction. That’s still up from 4.26% late Tuesday and from just 4.01% at the end of last week.
“Longer-term questions will almost certainly remain. But this afternoon’s announcement, combined with the Treasury auction, is a welcome relief after several days of very high volatility,” said Jeffrey Palma, head of multi-asset solutions and macro research at Cohen & Steers in New York.
The CBOE Volatility Index - seen as Wall Street’s “fear gauge” - fell sharply after the tariff pause to end the day at 33.62 points, compared with its session high of 57.96.
Minutes from the Federal Reserve’s meeting last month were also released in the afternoon.
Fed policymakers were nearly unanimous that the U.S. economy faced risks of simultaneously higher inflation and slower growth, with some policymakers noting that “difficult tradeoffs” could lie ahead for the central bank.
A consumer price inflation report scheduled for Thursday morning will be closely watched by investors for clues on the inflation trajectory.
The upcoming earnings season will offer more insights into the health of corporate America as investors fear a hit to economic growth from the tariffs. U.S. banks, including JPMorgan Chase, will report first-quarter results on Friday.
The S&P/TSX composite index ended up 1,220.13 points at 23,727.03.
Like on Wall Street, some of the biggest advancers were stocks that had fallen the most in recent sessions. The TSX technology sector rose 10.8%, with shares of e-commerce company Shopify jumping 17.5%.
Energy rallied 8.5% as the price of oil rebounded from a four-year low to settle 4.65% higher at US$62.35 a barrel.
The materials group, added 6.6% as gold and copper prices climbed.
Shares of clothing retailer Aritzia ended 18.6% higher, extending its recovery from a 10-month low on Friday.
In the U.S., the smallcap Russell 2000 Index added 8.66%, for its biggest one-day jump since March 2020.
All 11 of the S&P 500’s major industry indexes finished higher, with technology adding 14.15%. Defensive utilities were the slowest gainer, adding 3.91%.
Large technology stocks provided the biggest boost, with Nvidia adding 18.7% and Apple rising 15.3%.
The S&P 500 Auto Index ended up 20.95%, by far its biggest daily gain on record.
Delta Air Lines shares soared 23.4% after the carrier beat first-quarter profit expectations. The company, though, pulled its 2025 financial forecast and projected current-quarter profit below expectations.
Advancing issues outnumbered decliners by a 6.4-to-1 ratio on the NYSE where there were 30 new highs and 1,187 new lows.
On the Nasdaq, 3,841 stocks rose and 684 fell as advancing issues outnumbered decliners by a 5.62-to-1 ratio. The S&P 500 posted one new 52-week high and 100 new lows while the Nasdaq Composite recorded 12 new highs and 646 new lows.
Wednesday was a record day for trading volume with 30.5 billion shares changing hands on U.S. exchanges, compared with the 18.06 billion average for the last 20 sessions.
With files from Reuters and The Associated Press