Global stock markets are on the rise after Donald Trump’s surprise 90-day pause on most tariffs – except on China, which now faces a staggering 125% levy. While Europe and Asia welcomed the news with gains, US markets opened sharply lower, bucking the trend. As trade talks heat up with over 15 countries and inflation cools faster than expected, Wall Street remains jittery amid escalating tensions with Beijing.
What’s Behind the Market Turmoil?
Despite Trump’s late-night announcement to freeze tariffs at 10% for most countries, Wall Street had a rough opening. The Dow Jones fell 1.6%, the S&P 500 slid 2.3%, and the Nasdaq dropped nearly 3% – a sharp contrast to yesterday’s historic gains.
Economists point to fears over the US-China standoff, as China remains excluded from the tariff pause, now facing a crippling 125% levy.
“It’s like two bullies fighting in the schoolyard,” said Dan Ives from Wedbush Securities, “and the US consumer is caught in the middle.”
Bond Market Panic Forced Trump’s Hand
Trump’s decision to reverse course came just days after turmoil hit the US bond market – a red flag that spooked the White House.
“You can’t bully the bond market,” Ives noted. “Trump caved because of it.”
White House economic adviser Kevin Hassett confirmed that the bond meltdown “contributed” to the tariff pause but denied it was a panic move.
90-Day Tariff Freeze: Who Benefits?
The 90-day pause resets tariffs for all countries except China to a 10% baseline, offering a temporary reprieve for global trade partners. Among the first to respond was India, which is now fast-tracking a bilateral deal aiming for $500 billion in trade by 2030.
“We’ve got over 15 countries in talks,” Hassett told Fox News. “We’re going around the world in 80 days.”
Inflation Down, but Markets Still Nervous
Adding to the economic twist, US inflation fell more than expected in March, dropping to 2.4%, below forecasts of 2.6%. This should be good news for consumers – and Trump wasted no time celebrating, posting “INFLATION IS DOWN!!!” on Truth Social.
Still, investor anxiety lingers, especially around China, where tariffs remain harsh and no deal is in sight.
Global Rally, Local Drop: Why the Disconnect?
Markets in Europe, Asia, and the UK surged on the news of the tariff freeze. Yet the US market’s negative open reflects uncertainty over:
- Lingering US-China trade tensions
- The risk of consumer price shocks
- A volatile tech sector hit hard by earlier tariffs
Though yesterday’s gains were historic — the Nasdaq soared over 12%, its biggest jump since 2001 — today’s pullback shows that Wall Street is far from settled.
What’s Next?
With over a dozen trade deals in progress and inflation cooling, Trump is betting on fast results. But experts warn that without a resolution with China, market volatility could continue.
“This cannot continue,” Ives warned. “They’ve got 30-60 days to cut a deal.”
