empty
10.04.2025 01:22 PM
US indices jump up to 12% on tariff pause

This image is no longer relevant

S&P 500

Overview for April 10

US indices jump up to 12% on tariff pause

Major US indices on Wednesday: Dow +8%, NASDAQ +12%, S&P 500 +9.5%, S&P 500: 4,983, trading range: 4,800–5,700.

So, China is introducing retaliatory tariffs against the United States at a rate of 84%. This is a response to Trump's tariffs—104% in total on goods from China. Such a tariff level is prohibitive and effectively shuts down normal trade. Reports already suggest that some major importers such as Amazon are halting cargo ships carrying goods from China to the United States.

US Treasury Secretary Scott Bessent called China's countermeasures a foolish move and urged negotiations. Similarly, a day earlier, Trump who first imposed those tariffs stated that China allegedly intends to make a deal. It is quite clear that Trump wants China to ask him for a deal. However, it is also clear that this is a matter of saving face for Chinese President Xi Jinping—asking the person who attacked you to negotiate. So far, China's statements have sounded like: "We are ready to fight to the end." It is quite evident that a rupture in trade relations will hit both countries hard, but I personally believe China will suffer more than the US.

Markets surged midday when Trump announced a 90-day pause on new tariffs. However, Trump added that this only applies to countries that did not introduce retaliatory measures. And immediately after, Trump announced that tariffs on China would rise to 125%.

This sent US indices sharply higher, with oil jumping from $60 to $64 per barrel.

Within about thirty minutes, US market capitalization recouped $3.5 trillion following the announcement of the 90-day tariff pause.

A bit later, Treasury Secretary Scott Bessent said the tariff rate for countries willing to negotiate with the United States would be reduced to 10%, including Canada and Mexico.

"Every country in the world who wants to come and negotiate, we are willing to hear you," Bessent said.

Later still, Trump reiterated that China "wants to make a deal" on tariffs with the US, but Xi is "is a proud man. I know him very well. They don't know quite how to go about it but they'll figure it out." In this way, Trump continues to hope that Beijing will be the first to propose an agreement and make concessions.

Goldman Sachs lowered its estimate of the probability of a U.S. recession to 45%, from 65% a day earlier, following Trump's decision to pause tariffs for 90 days except those targeting China. The bank said the remaining tariffs still in effect will likely raise the average effective US tariff rate by 15%.

Conclusion: The market rally was partly driven by the perception that amid the chaos caused by Trump's "tariff war against everyone," by the evening of April 9, it was beginning to look more like a targeted campaign — a trade war against one opponent: China. That is still a major issue, but far less threatening than a US trade war with the entire world. Moreover, there is still a chance that a US-China trade agreement may be reached — and if it is, markets will almost certainly rally once again.

Jozef Kovach,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Mihail Makarov
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Overview – July 17: The UK Has Accepted Trump's Terms. Consequences

The GBP/USD currency pair also traded more calmly on Wednesday compared to Tuesday, although a surge occurred in the evening. Let us recall that we do not consider Tuesday's decline

Paolo Greco 03:21 2025-07-17 UTC+2

EUR/USD Overview – July 17: U.S. Inflation Will Only Accelerate

The EUR/USD currency pair traded more calmly on Wednesday than it had on Tuesday, remaining relatively stable until the evening. There were no major fundamental or macroeconomic events in either

Paolo Greco 03:21 2025-07-17 UTC+2

The Dollar Is Accumulating Risk Factors Again

Demand for the US dollar has been growing for the third consecutive week. Initially, it was a slow and sluggish strengthening, but in recent days, it has gained momentum

Chin Zhao 00:45 2025-07-17 UTC+2

GBP/USD: UK CPI and US PPI

The "green tone" of the UK CPI did not help GBP/USD buyers. All signs of stagflation are evident: the UK economy is contracting, the labor market is cooling, and inflation

Irina Manzenko 00:45 2025-07-17 UTC+2

Australian Dollar Awaits Labor Market Data

The Australian dollar experienced a slight decline following the release of China's GDP data, which the market interpreted with some ambiguity. While a 5.2% GDP growth rate appears solid

Kuvat Raharjo 00:45 2025-07-17 UTC+2

Euro Plunges Off a Cliff

Is the euro as strong as it may have seemed just a couple of weeks ago? According to the Bundesbank, Germany's economy is stagnating in the second quarter

Marek Petkovich 00:45 2025-07-17 UTC+2

Gold Gets Stabbed in the Back by Inflation

Is gold overbought? Or just in a waiting mode? Investor opinions are divided. However, the negative reaction of XAU/USD to strong U.S. job growth and a surge in inflation

Marek Petkovich 00:45 2025-07-17 UTC+2

USD/JPY. Analysis and Forecast

At this stage, the Japanese yen has paused its decline against the US dollar. However, further strengthening of the yen in the near term appears unlikely. The key factors influencing

Irina Yanina 20:47 2025-07-16 UTC+2

AUD/JPY. Analysis and Forecast

On Wednesday, the AUD/JPY pair is attracting buyers, even though the Japanese yen remains relatively weak due to domestic political uncertainty. Moreover, according to polls, Japan's ruling coalition—the Liberal Democratic

Irina Yanina 13:04 2025-07-16 UTC+2

GBP/USD: Analysis and Forecast

Today, the GBP/USD pair is attempting to regain positive momentum and rise above the key psychological level of 1.3400, aiming to break a multi-day losing streak. However, spot prices remain

Irina Yanina 12:51 2025-07-16 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.