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

Market fears nothing

The S&P 500 reached another all-time high, with rotation being the hallmark of the US equity market. Investors are aggressively buying up stocks that underperformed in the first half

Marek Petkovich 10:50 2025-07-11 UTC+2

What to Watch for on July 11th? A Fundamental Overview for Beginners

There are very few macroeconomic publications scheduled for Friday, but the volume is still greater than on any previous day this week. The UK will release GDP and industrial production

Paolo Greco 08:50 2025-07-11 UTC+2

GBP/USD Overview on July 11, 2025

The GBP/USD currency pair failed to consolidate above the moving average on Thursday, so the correction continues for now. Throughout Thursday, the GBP/USD pair was unable to hold above

Paolo Greco 07:15 2025-07-11 UTC+2

EUR/USD Overview on July 11, 2025

The EUR/USD currency pair spent Thursday calmly drifting lower. We continue to wait for the current correction to end and for the uptrend to resume. To be fair, this correction

Paolo Greco 07:08 2025-07-11 UTC+2

XAU/USD. Analysis and Forecast

Gold prices are maintaining positive momentum for the second consecutive day. Ongoing uncertainty surrounding U.S. President Donald Trump's trade policy and its impact on the global economy continues to weigh

Irina Yanina 19:24 2025-07-10 UTC+2

USD/CHF. Analysis and Forecast

Today, the USD/CHF pair retraced part of its decline from a new weekly low recorded during the Asian session and has temporarily paused its downward movement, stopping short

Irina Yanina 12:26 2025-07-10 UTC+2

Market dupes sellers

The split within the Federal Reserve, NVIDIA's successes, and a successful auction of 10-year US Treasury bonds allowed the S&P 500 to ignore the tariff chaos. Donald Trump announced tariffs

Marek Petkovich 12:02 2025-07-10 UTC+2

What to Watch on July 10th: Fundamental Event Overview for Beginners

Macroeconomic Report Analysis: There are very few macroeconomic publications scheduled for Thursday, and none of them are expected to be significant. So what could traders focus on today? The second

Paolo Greco 09:07 2025-07-10 UTC+2

GBP/USD Overview on July 10, 2025

On Wednesday, the GBP/USD currency pair maintained its downward movement, which is corrective in nature and could end at any moment. The price remained below the moving average line

Paolo Greco 07:26 2025-07-10 UTC+2

EUR/USD Overview on July 10, 2025

The EUR/USD currency pair continued to trade very calmly on Wednesday. The pair maintained a slight downward bias, as we've noted in all of our recent articles. However, the current

Paolo Greco 07:16 2025-07-10 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.