U.S. stocks ended sharply higher on Wednesday, with all three major indexes recording one of their best days ever, after President Trump announced a 90-day pause on tariffs on most countries, bringing relief to markets that had come under extreme pressure over the past few sessions.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) soared 7.9% or 2962.86 points, to end at 40,608.45 points. The blue-chip index notched its biggest single-day percentage gain since March 2020.
The S&P 500 surged 9.5% or 474.13 points, to close at 5,456.90 points, recording its biggest single-day gain since 2008. Tech, consumer discretionary, communication services and industrial stocks were the biggest gainers.
The Technology Select Sector SPDR (XLK) jumped 13.4%. The Industrial Select Sector SPDR (XLI) rose 8.9%. The Consumer Discretionary Select Sector SPDR (XLY) advanced 10.9%, while the Communication Services Select Sector SPDR (XLC) rose 8.8%. All 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq rallied 12.2% or 1,857.06 points to finish at 17,124.97 points, and recorded its biggest single-day jump since January 2001 and the second-best day ever.
The fear-gauge CBOE Volatility Index (VIX) was down 37.75% to 18.71. Advancers outnumbered decliners on the NYSE by a 6.4-to-1 ratio. On the Nasdaq, a 5.62-to-1 ratio favored advancing issues. A total of 30.5 billion shares were traded on Wednesday, higher than the last 20-session average of 18.06 billion.
Trump Pauses Tariffs, Wall Street Rallies
Stocks went on a historic rally on Wednesday after Trump announced a temporary 90-day pause on his reciprocal tariffs on most countries. Over 30 billion shares were traded, recording the biggest day in terms of volume in Wall Street’s history.
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump announced on his Truth Social. However, he also said that he was hiking tariffs on China to 125% after Beijing retaliated with an 84% tariff on U.S. imports.
The broader market recorded its third-biggest single-day gain post-World War II. The pause on tariffs came less than 24 hours after they went into effect. Treasury Secretary Scott Bessent said that the blanket 10% tariffs on all countries will remain. However, the higher rates imposed on those countries will be on hold as negotiations take place.
The record rally followed a four-day bloodbath that saw indexes recording their biggest percentage loss since the COVID-19 pandemic.
Stocks that had come under pressure the most after Trump announced his sweeping tariffs on April 2, rebounded and led Wednesday’s rally. Shares of Apple Inc. (AAPL) surged 15.3%, while NVIDIA Corporation (NVDA) soared 18%. Shares of Tesla, Inc. (TSLA) rallied 22.7%. Tesla has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investor sentiment also got a boost by the U.S. Treasury's $39 billion auction of 10-year notes. The auction surpassed market expectations and was priced at a high yield of 4.435%, which was below the predicted rate at the time of bidding.
Investors Await CPI Data
The minutes of the Federal Reserve’s March policy meeting were also released on Wednesday. The minutes released that Fed officials believe that the economy still faces the risk of higher inflation and slower growth and the central bank has a difficult path ahead.
Investors are now looking forward to Thursday’s consumer price index (CPI) report for March, which will give them a clearer idea of the economy’s health.
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Apple Inc. (AAPL): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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