Dow closes up 2,962 points in market rally as Trump backs off some tariffs
United States stocks closed with major gains on Wednesday after President Donald Trump announced a 90-day pause on some tariffs, marking a reversal from days earlier when Trump said the policy would "never change."
The Dow Jones Industrial Average climbed 2,962 points, or 7.8%, marking the index's best day since 2020.
The S&P 500 jumped 9.5%, while the tech-heavy Nasdaq soared 12.1%.
The spike in the three major stock indexes erased much of the losses suffered in the aftermath of sweeping new tariffs issued by Trump a week ago.
On Wednesday afternoon, Trump announced a 90-day pause on the higher tariffs for most countries that he announced last week, while maintaining a 10% baseline tariff across the board. Speaking later in the day, Trump said he enacted the policy reversal because people were "getting yippy" amid the tariff fallout.
"I thought that people were jumping a little bit out of line. They were getting yippy. You know, we're getting a little bit yippy, a little bit afraid," he told reporters on Wednesday afternoon.
Even after the rally, markets remained lower than where they stood before Trump rolled out his "reciprocal" tariff plan at a Rose Garden event on April 2.
Trump on Wednesday also announced additional tariffs on China, increasing the cumulative tariffs on Chinese goods from 104% to 125%. The escalation came in response to a fresh round of tariffs from China that raised levies on U.S. goods to 84%.
European Union countries also backed the European Commission's proposal to push back on Trump's tariffs on steel and aluminum with a set of countermeasures on Wednesday.
In Europe, key indices dropped on opening Wednesday.
The British FTSE 100 dropped by 2.2%, Germany's Dax index dropped 2.3%, France's CAC 40 fell by 2.4% and Spain's Ibex index was down 2%. The pan-European STOXX index was down 2.6%.
The market rally followed tumult on Tuesday, when U.S. stocks closed lower, marking a major reversal from a rally that sent the S&P 500 and Nasdaq up more than 4% earlier in the day.
The Dow Jones Industrial Average closed down 320 points, or 0.8%, while the Nasdaq dropped 2.1%.
The S&P 500 fell 1.5%, putting the index on the brink of a bear market, a term that indicates a 20% drop from a previous peak.
The move lower on Tuesday resumed a selloff that stretched back to Trump's tariff announcement April 2. Since then, the S&P 500 and Nasdaq have each fallen more than 12%.
