Wall Street Rollercoaster Rolls on as Trump Pauses Tariffs; S&P 500's Best Day Since 2008
All three major US equity indexes skyrocketed Wednesday, posting their biggest one-day gains in years after its largest four-day percentage loss since the pandemic, as bargain hunters returned to Wall Street.
This surge followed President Trump's announcement of a 90-day pause on sweeping tariffs despite a 125% levy on Chinese imports.
However, the White House maintained a 10% blanket duty on almost all US imports.
The increase in China tariffs was in response to China's announcement of an 84% levy on US goods, set to begin on April 10.
Minutes from the Federal Reserve's last meeting revealed near-unanimous concerns about the US economy facing higher inflation and slower growth.
Some policymakers highlighted "difficult trade-offs" ahead.
Investors now focus on Thursday's consumer price inflation report (CPI) and Friday’s Producer Price Index (PPI) for insights on inflation trends.
Heading into Wednesday, the S&P 500 had dropped 12% over four sessions since President Trump announced his plan for sweeping tariffs, particularly targeting China, Japan, and the EU.
However, at the New York close, preliminary data showed that the Dow Jones Industrial Average rose 2,962.86 points, or 7.87% 40,608.45.
The S&P 500, a key global benchmark, rose 474.13 points, or 9.52%, to 5,456.90, marking its best day since October 2008.
Meanwhile, the tech-heavy Nasdaq Composite surged 1,857.06 points, or 12.16%, to 17,124.97, its largest one-day gain since January 2001, during the height of the Internet Bubble.
The Internet bubble, fueled by the rise of the World Wide Web in 1991, led to over-investment in tech, causing rapid growth followed by a collapse in the Nasdaq.
Focusing on the Mega-cap tech stocks, the "Magnificent Seven" gave a stellar performance, led by a 23% gain for EV maker Tesla.
Chipmakers Nvidia surged 18%, Apple and Meta Platforms added about 15%, Amazon gained 12%, and Microsoft and Alphabet rose 10%.
In bonds, crypto and commodities
The 10-year Treasury yield, which influences mortgage rates and other key loans in the US government bond market, settled at 4.28%.
The policy-sensitive two-year yield, which closely tracks Federal Reserve interest rate adjustment expectations, closed at 3.93%.
Bitcoin, the flagship cryptocurrency, held above key support levels between US$72,000 and US$76,000 after trading at US$81,632, up from around US$74,657 just before Trump's announcement, providing a boost to crypto-related stocks.
As the roller coaster continues, the key support levels between US$72,000 and US$76,000 should be closely monitored for signs of a potential demand/rebounds or further pullback if breached.
A close beneath or around US$72,000 would warrant a reassessment!
Ethereum mirrored Bitcoin's volatile price movement, fluctuating between US$1,388 and US$1,685 before settling at US$1,670.
Although we have witnessed a positive sentiment, it's important to continue monitoring, as losses could still reach the US$1,100 – US$1,300 region.
Reassessment will be necessary from there.
Safe-haven demand increased as spot gold surged to $3,121 an ounce, back on track to target $3,200, while silver closed at $31.12.
In the energy sector, oil prices also jumped on the tariff news, with Brent crude settling lower at $64.80 a barrel, while US West Texas Intermediate (WTI) crude, the US crude oil benchmark, closed at $61.28.
Meanwhile, the US Dollar Index (DXY), which tracks the greenback against a basket of currencies, was higher at 102.40.
The Eurodollar was 1.0984, and the British pound finished at 1.22848. The Japanese yen ended at 146.66, and the Australian dollar was at 0.6166.
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