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By Gabe Whisnant and Sonam Sheth
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President Donald Trump urged Americans and investors to "be cool" on Wednesday morning, adding that "this is a great time to buy," as markets continued to convulse over his sweeping tariffs policy.
What To Know
A few hours later, the president abruptly announced that he would pause most reciprocal tariffs for 90 days and increase tariffs on China to 125 percent after Beijing announced its own retaliatory tariffs on U.S. exports.
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Stocks subsequently skyrocketed, with the broad market index spiking 7.8 percent in Wednesday afternoon trading. The Dow Jones Industrial Average jumped 2,476 points, or 6.6 percent, while the tech-heavy Nasdaq Composite Index soared 9 percent.
The sudden surge followed days of turmoil as Trump and his advisers repeatedly insisted that he would not back down on his tariff threats, which consisted of a 10 percent baseline tariff across the board and reciprocal tariffs on dozens of countries, including many of the U.S.'s top trading partners.
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Trillions of dollars evaporated from the market over the last several days and the S&P 500 was flirting with bear market territory on Wednesday morning. Uncertainty over the president's trade war also hit the bond market as Trump's reciprocal tariffs went into effect at midnight Wednesday.
"THIS IS A GREAT TIME TO BUY!!! DJT," Trump wrote on Truth Social shortly after 9:30 a.m. ET on Wednesday. In a separate post, he wrote: "BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!"
As of 11 a.m. ET, the Dow Jones Industrial Average had dropped 263 points, or 0.7 percent, while the Nasdaq inched up 0.2 percent.
Shortly after 1:15 p.m. ET, Trump announced on Truth Social that he would pause reciprocal tariffs on 75 countries that he said had called up U.S. officials in recent days "to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs ... These Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States ... I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
"Thank you for your attention to this matter!"
Markets rebounded almost immediately, as multiple Trump administration officials who spent the last several days saying he wouldn't budge on his tariffs insisted that this was the plan all along.
What People Are Saying
White House press secretary Karoline Leavitt referenced Trump's book, telling reporters outside the White House: "Many of you in the media have clearly missed the art of the deal."
Commerce Secretary Howard Lutnick, a strong proponent of Trump's tariff policy, responded to his announcement on X, formerly Twitter: "[Treasury Secretary] Scott Bessent and I sat with the President while he wrote one of the most extraordinary Truth posts of his Presidency. The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction."
Sawyer Hackett, a Democratic strategist, on X: "Wow. Trump just caved on the sweeping across-the-board tariffs, issuing a 90-day pause. All of that chaos, trillions of dollars evaporated—for nothing at all."
Scott Lincicome, VP, General Economics, Cato Institute, told CNN: "Markets are relieved a bit, but I don't know how you could possibly think the U.S. is a sound, safe and stable place to invest when the president is flipping tariffs on and off like a light switch and there could be more of these things in a mere 90 days. So a bit of a reprieve, but we're definitely not out of the woods."
What Happens Next
Trump will pause his so-called reciprocal tariffs for 90 days while the U.S. negotiates revised trade agreements with more than 70 countries.
Reporting by the Associated Press contributed to this story.
Update 4/9/25, 11:23 a.m. ET: This article has been updated with additional information and context.
Update 4/9/25, 2:27 p.m. ET: This article has been updated with additional information and context.
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