The stock market experienced a significant recovery after former President Donald Trump announced a 90-day pause on tariffs. This move added more than $1.5 trillion in value to the market. The sharp upswing was primarily driven by the “Magnificent Seven,” a group of major technology and consumer companies that saw considerable gains.
The White House announcement, which included a reduction in tariffs for other countries, was well-received on Wall Street. It helped restore investor confidence and stabilize global markets. Alphabet Inc.
and Amazon.com Inc. were among the notable economic powerhouses leading the charge. Investors responded positively to the reduced trade tensions and the potential for increased global commerce facilitated by the paused tariffs.
However, questions have been raised about the timing of Trump’s announcement. More than 9 million Trump followers on his Truth Social media platform had a hint that something big was going to happen hours before the tariff reversal. This delivered a $US4 trillion Wall Street windfall that cascaded globally.
Trump himself was among the biggest beneficiaries.
Market soars on tariff pause
Truth Social, his social media platform, soared more than 22 percent, adding more than $US400 million to the value of his 53 percent stake.
Tesla, under Elon Musk’s leadership, saw a nearly 23 percent surge. Musk and Mark Zuckerberg added a combined $US62 billion to their fortunes. The timing of Trump’s post and his announcement hours later has raised suspicions of a multitrillion-dollar insider trading scam.
Political opponents were vocal in their accusations. “The President of the United States is literally engaging in the world’s biggest market manipulation scheme,” stated the House Committee on Financial Services. Influential insiders like Elon Musk had been lobbying heavily against the tariffs, fearing the impact on their businesses.
However, it was the bond market that ultimately swayed Trump. Treasury Secretary Scott Kenneth Homer Bessent highlighted the importance of long-term bond prices over the sharemarket in supporting Trump’s economic overhaul. The tech-driven rally saw the overall S&P 500 surge by 9.5% at Wednesday’s close.
The Dow advanced by 8%, and the tech-heavy Nasdaq saw an impressive 12% rise. Tesla’s remarkable climb positioned it as one of the top-performing stocks, with AI chipmaker Nvidia also surging, its shares up over 18%. As the markets continue to react to global trade developments and economic indicators, investors remain cautiously optimistic about the sustainability of this current rally.
