Trump's 90-Day Tariff Pause Sparks 8% S&P 500 Rally, 10% Nasdaq Gain

On April 9, 2025, President Donald Trump announced a 90-day pause on tariffs for most countries, with the exception of China, which now faces a 125% tariff hike. This decision initially caused market confusion and volatility, but it was later seen as a strategic move by his allies. The pause led to a significant market rally, with the S&P 500 jumping over 8% and the Nasdaq gaining more than 10%, indicating renewed investor confidence. Goldman Sachs also rescinded its recession prediction, attributing the shift to the clarity and potential global de-escalation offered by the tariff pause. This marked a pivotal moment in Wall Street sentiment, flipping bearish expectations into cautious optimism.

Trump's strategy behind the tariff pause was clear: to correct a broken trade dynamic and force China to the negotiation table. He asserted that China made over $1 trillion in trade gains last year from the U.S. and that his administration has now "reversed it." Trump claimed that China wants to make a deal and is in the process of figuring it out. Treasury Secretary Bessent reinforced this by saying this was Trump’s strategy all along—to goad China into a weakened position. She also confirmed the timing was deliberate and not a response to market panic.

Crypto investor and "Crypto Czar" David Sacks added fuel to the narrative by accusing critics of rooting for Trump’s failure—even if it meant a market crash. This echoes a broader sentiment across pro-Trump circles: that the market rebound and Goldman’s reversal prove the administration’s approach is not just working, but strategically sound. However, the road ahead remains uncertain. The 125% tariff on Chinese goods is still in place, and China’s retaliation via WTO complaints and increased tariffs could reignite tensions. Yet, if China comes to the negotiation table and broader trade relations improve, this move may mark a turning point for both Trump’s legacy and global economic stability.

Trump’s 90-day tariff pause wasn’t just a policy decision—it was a market-moving, recession-reversing power play. With political allies and market analysts shifting their tone, and China reportedly “figuring it out,” the next few weeks could determine whether this rebound sustains—or if volatility rears its head once more. The tariff pause has shaken markets, potentially reversing a recession and setting the stage for strategic negotiations with China. The outcome will depend on how both sides navigate the complex chessboard of global trade dynamics.