US stock market makes historic gains after Trump pause tariffs

US stocks soared to one of their best days in history on a euphoric Wall Street after President Donald Trump said he would back off on most of his tariffs temporarily, as investors had so desperately hoped he would.

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The S&P 500 Wednesday surged 9.5 per cent, an amount that would count as a good year for the market. It had been sinking earlier in the day on worries that Trump’s trade war could drag the global economy into a recession. But then came the posting on social media that investors worldwide had been waiting and wishing for.

“I have authorised a 90-day PAUSE,” Trump said, after recognising the more than 75 countries that he said have been negotiating on trade and had not retaliated against his latest increases in tariffs.

Treasury Secretary Scott Bessent later told reporters that Trump was pausing his so-called reciprocal tariffs on most of the country’s biggest trading partners, but maintaining his 10 per cent tariff on nearly all global imports.

China was a huge exception, though, with Trump saying tariffs are going up to 125 per cent against its products. That raises the possibility of more swings ahead that could stun financial markets. The trade war is not over, and an escalating battle between the world’s two largest economies can create plenty of damage. US stocks are also still below where they were just a week ago, when Trump announced worldwide tariffs on what he called “Liberation Day”.

But on Wednesday, at least, the focus on Wall Street was on the positive. The Dow Jones Industrial Average shot to a gain of 2,962 points, or 7.9 per cent. The Nasdaq composite leaped 12.2 per cent. The S&P 500 had its third-best day since 1940.

The relief came after doubts had crept in about whether Trump cared about the financial pain the US stock market was taking because of his tariffs, The S&P 500, the index that sits at the center of many 401(k) accounts, came into the day nearly 19 per cent below its record set less than two months ago.