In a dramatic turn on Wall Street, U.S. stock indexes recorded their biggest one-day gains in over a decade following former President Donald Trump’s announcement of a temporary pause on higher tariffs. The move, aimed at easing economic tensions, ignited a buying frenzy across markets, with major indexes posting historic gains.
According to Bloomberg, the S&P 500 closed 9.5% higher, while the tech-heavy Nasdaq 100 soared 12%. The Dow Jones Industrial Average also jumped 7.9%, marking a major rebound amid recent market turbulence. Roughly 30 billion shares changed hands during the session — the most on record as per Bloomberg data.
Trump made the announcement late Wednesday via social media, stating, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.” However, the pause specifically excludes tariffs on China, which remain elevated at 125% after Beijing retaliated earlier with an 84% levy on U.S. imports.
The S&P 500’s surge marked its biggest intraday reversal — nearly 11% — since the 2008 global financial crisis. The rally even surpassed gains seen during the infamous 2010 Flash Crash. Goldman Sachs reported that its basket of most-shorted stocks surged 17.34%, outpacing the broader index.
The sharp rally was driven in part by hedge funds scrambling to cover short positions and increased buying in tech. “We currently have aggressive covering among hedge funds and long only buying in tech that is ramping with each leg higher in the market,” wrote Goldman Sachs partner John Flood in a client note.
JPMorgan Chase’s prime brokerage unit had earlier warned that such a rally could trigger a significant short squeeze. Leveraged exchange-traded funds (ETFs) also played a role in intensifying the uptrend. “Levered ETFs mechanically adding long equity exposure supercharged the rally,” said Daniel Kirsch, head of options at Piper Sandler.
Among the standout gainers were Nvidia Corp. (+18.03%), Advanced Micro Devices (+23.82%), Delta Air Lines (+23.38%), and Tesla Inc. (+22.69%). Meanwhile, the Cboe Volatility Index (VIX), often called Wall Street’s “fear gauge,” plummeted from 50 to 35 — a sign of easing investor anxiety.
While optimism surged in the wake of Trump’s tariff pause, analysts caution that uncertainties remain, especially with trade tensions with China still unresolved.
