On Wednesday, U.S. stocks experienced one of their strongest days in history after President Donald Trump announced a temporary pause on most tariffs, sending the S&P 500 surging by 9.5%. The announcement came as a relief to investors who had been concerned about the impact of the trade war on the global economy. While most tariffs were temporarily halted, tariffs on Chinese products were increased to 125%, signaling that the trade war is far from over.
Despite the positive day on Wall Street, analysts warn that the trade war between the U.S. and China could still have damaging effects on the economy. The rally in the stock market was also attributed to a smooth auction of U.S. Treasurys, which helped alleviate some pressure on the market. However, the rise in Treasury yields could potentially impact mortgage rates for U.S. households and businesses.
While the trade war continues to escalate, with China announcing retaliatory measures against U.S. goods, the temporary pause on tariffs provided a much-needed boost to the stock market. The S&P 500 index pulled back from the edge of a “bear market,” easing concerns among investors. It remains to be seen how the ongoing trade negotiations will unfold, but for now, Wednesday’s rally offered a respite for a market that had been on edge.
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