On April 10, 2025, global stock markets experienced a significant rally, driven primarily by the Trump administration’s decision to suspend tariffs on certain economies for 90 days. This move has had a profound impact on investor sentiment, leading to substantial gains across major indices.

US Stock Market Soars

The US stock market witnessed a historic rally on April 9, with the Nasdaq Composite surging by 12.16%, marking its second-largest single-day gain ever. The S&P 500 also saw its third-largest gain since World War II, rising by 9.52%, while the Dow Jones Industrial Average jumped by 7.87%. The surge was fueled by the tariff suspension announcement, which boosted investor confidence and led to a surge in trading volumes to an 18-year high.

Tech giants were among the biggest winners, with six out of the “seven big tech companies” posting double-digit gains. Tesla led the charge with a 22.69% increase. Apple, in particular, saw its stock price soar by 15%, its best performance since 1998. This surge added over $400 billion to Apple’s market value, reflecting investor optimism about the potential benefits of reduced tariffs on its production facilities in Vietnam and India.

Global Market Reactions

The impact of the tariff suspension was felt beyond the US, with global markets responding positively. European indices such as the DAX and CAC 40 also saw gains, as investors welcomed the temporary relief from trade tensions. In Asia, markets like the Nikkei 225 and the Hang Seng Index also benefited from the improved sentiment.

However, not all markets experienced gains. The German DAX index fell by 3%, while the French CAC 40 index dropped by 3.34%. The UK’s FTSE 100 index also declined by 2.92%, reflecting broader concerns over the global economic outlook.

Economic and Policy Implications

The tariff suspension has also had broader economic and policy implications. The decision has led to a reassessment of the Federal Reserve’s interest rate policy, with market expectations for a rate cut this year being scaled back. The yield on the two-year US Treasury note has surged by 30 basis points, reflecting the changing outlook.

The move has not been without criticism. Former US Treasury Secretary Larry Summers has accused the Trump administration of losing significant credibility due to its inconsistent trade policies. Additionally, concerns have been raised about the potential impact on global supply chains. For instance, Bank of America has warned that if Apple were to move its production lines back to the US, costs could soar by over 90%.

A Volatile Future

Despite the temporary relief provided by the tariff suspension, the underlying issues remain unresolved. Countries like China and the EU have already announced retaliatory tariffs, indicating that the trade conflict could escalate further. Analysts warn that the current rally may be short-lived, and investors should remain cautious in the face of ongoing uncertainty.

The decision to suspend tariffs for 90 days has sparked a global market rally, highlighting the interconnected nature of the world economy. However, the long-term outlook remains unclear, and investors must remain vigilant in the face of ongoing trade tensions and economic uncertainties.