This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
Donald Trump, the president of the United States, halted his high “reciprocal” tariffs and replaced them with a uniform 10% rate for ninety days. Following the announcement, stocks surged higher and reached all-time highs. According to Treasury Secretary Scott Bessent, Trump had the plan “all along.”
Another question is whether the plan is sound. On Wednesday, investors shouldn’t allow the rush of market enthusiasm to carry them away. Recall that Trump only permitted a 90-day reprieve to facilitate negotiations. The tariff rate of 10% is temporary. Furthermore, China, one of the United States’ largest trading partners, is still subject to high tariffs.
Additionally, relief rallies are most common during protracted downturns, such as the financial crisis of 2008 or the dot-com boom of the 2000s.
Uncertainty, the scourge of markets, remains the game’s name as negotiations proceed and may even be a component of the plan, assuming one exists at all.
What To Note Today
Trump lowers tariffs for 90 days to 10%
For ninety days, U.S. President Donald Trump lowered new tariff rates on imports from most U.S. trading partners to 10% to facilitate talks with those nations. Hours after imports from around 90 countries were subject to stricter, reciprocal duties, Trump announced the suspension on Wednesday. Treasury Secretary Scott Bessent told reporters that Trump’s objective “always” was to reduce tariffs. However, after Beijing increased its taxes on U.S. imports to 84% from 34% beginning April 10, Trump increased tariffs on Chinese goods to 125%.
Large and unprecedented stock market boom
Wednesday saw a relief surge that sent U.S. stocks skyrocketing. The S&P 500 saw its largest one-day increase since 2008, rising 9.52%, making it the third-largest jump in post-World War II history. The Dow Jones Industrial Average grew its largest since March 2020, rising 7.87%. With a 12.16% rise, the Nasdaq Composite recorded its second-best day ever and its biggest one-day increase since January 2001. According to 18-year-old records, around 30 billion shares were exchanged, making it the highest volume day on Wall Street.
Dead-cat bounce
Perhaps it’s too soon to celebrate the market’s advances. Wednesday was the second-best day for the Nasdaq Composite, only surpassed by its 14.17% gain in January 2001, during the height of the dot-com bust. Additionally, the Nasdaq had two of its greatest five days ever during the October 2008 financial crisis. Call it short covering, a relief rally, or a dead-cat bounce. According to Ari Levy of CNBC, it’s a typical response at Wall Street’s darkest moments.
Asian tech stocks rise
Wall Street and Asia-Pacific markets both saw gains Thursday. The Nikkei 225 in Japan surged more than 8%, while the Kospi in South Korea surged more than 6%. Gains in Asian tech behemoths like Samsung Electronics, SoftBank Group, SK Hynix, and Renesas Electron boosted both indices. However, the growing U.S.-China trade conflict affected investor sentiment, thus shares listed in Hong Kong did not climb as much.
Additional indications of China’s deflation
Following a 0.7% contraction in February, China’s consumer price index fell 0.1% year over year in March, staying in deflationary territory, the National Statistics Bureau said Thursday. Economists surveyed by Reuters predicted a flat reading when compared to the same time last year. March saw a 2.5% decline in producer prices compared to last year’s, marking the 29th consecutive month of declines.
Goldman decreases recession odds after raising them.
Goldman Sachs increased its prediction of a U.S. recession and forecasted that the country’s GDP would contract this year less than an hour before Trump’s tariff delay. The bank nearly instantly retracted its prediction.
Other Updates
Musk has launched an “illegal campaign of harassment” against the firm, according to OpenAI’s lawsuit.
On Wednesday, OpenAI sued Elon Musk, claiming that the richest man in the world had “tried every tool available to harm” the AI startup.
An injunction to prevent Musk from further interfering with the nonprofit’s activities and punitive damages for Musk’s acts are sought in the case, which was filed in a federal district court that halted Musk’s attempt to prevent the nonprofit from becoming a for-profit organization last month.Â
In addition to being the CEO of SpaceX and Tesla, Musk founded the OpenAI competitor xAI in 2023 and owns the social media platform X.
