US stocks, cryptocurrencies surge on tariff reversal

US equities and cryptocurrencies surged Wednesday after President Trump issued a stark reversal on tariff policies. 

The Dow Jones Industrial Average gained 2,600 points Wednesday afternoon while the SP 500 surged 9.1%, marking the biggest intraday rally for both indexes in five years. 

The Nasdaq Composite rallied almost 12%, a daily gain not seen since 2008. Bitcoin and ethereum gained as much as 6% and 11%, respectively. 

The moves followed Trump’s announcement that reciprocal tariffs on all countries except for China will be delayed for 90 days. He also said the levy on Chinese imports will be raised from 104%, which took effect just after midnight, to 125%. 

Treasury Secretary Scott Bessent said tariffs on all countries other than China will remain at 10% in the interim. 

The 10-year Treasury yield, which spiked to 4.51% overnight, also declined to 4.3% following the White House’s announcement. 

The cooling follows a better-than-anticipated 10-year auction Wednesday, indicating that demand remains high. Indirect bidders, which represent an imperfect proxy for foreign buyers, made up about 88% of accepted bids. 

Wednesday’s changes marked a change from the White House’s previous stance on tariffs. Since last week, the administration’s insisted that the new “Liberation Day” tariffs would proceed as scheduled. 

Commerce Secretary Howard Lutnick on Sunday maintained that “there is no postponing.” Also on Sunday, Peter Navarro, White House senior counselor for trade and manufacturing, said “this is not a negotiation” when asked about potentially adjusting tariffs.

While investors breathe a sigh of relief, though, the volatility is far from over. Markets now face another three months of uncertainty about where tariffs will land. Still, analysts’ general outlook has improved. 

Apollo chief economist Torsten Slok and Goldman Sachs analysts both rescinded their forecasts for a 2025 recession Wednesday afternoon.

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