- The stock market posted its third biggest gain in post-WWII history.
- Trump lowered steep “reciprocal” tariffs to 10% for 90 days to allow countries time to negotiate, but he hiked tariffs on China to 125%.
- Shares of Apple climbed 15% for the stock’s best day since 1998.
Here are five key things investors need to know to start the trading day:
1. Reversing course
The stock market posted its third biggest gain in post-WWII history on Wednesday after President Donald Trump announced a temporary reversal of his so-called reciprocal tariffs. The Dow Jones Industrial Average rose 2,962.86 points, or 7.87%, for its best percentage gain since March 2020. The S&P 500 skyrocketed 9.52%, its largest one-day rise since 2008. And the Nasdaq Composite popped 12.16%, its best day since January 2001. But that doesn’t necessarily mean the market is out of the woods yet: The dot-com bust, 2008 financial crisis and Covid pandemic crash all saw similar relief rallies. Stock futures were lower Thursday morning ahead of March’s consumer price index reading, due at 8:30 a.m. ET. Follow live market updates.
2. Tariffs on, tariffs off
Exactly one week after announcing a slate of “reciprocal tariffs” that sent global markets into a free fall and sparked fears of a recession, Trump on Wednesday walked back the higher rates. In a midday Truth Social post, the president announced that the steep tariffs — which had taken effect about 13 hours earlier — would drop to 10% for 90 days to allow countries time to negotiate. But the reprieve does not apply to China. Beijing now faces a 125% duty on its exports to the U.S., up from 104%, after Trump again responded to China’s countermeasures by hiking tariffs. Treasury Secretary Scott Bessent said Wednesday that the reversal “was [Trump’s] strategy all along,” but the president later in the afternoon said he paused higher tariffs because people “were getting a little bit yippy.” Follow live tariff updates.
3. Supercharged
The tech-heavy Nasdaq Composite recorded its second best day ever on Wednesday, jumping higher after Trump walked back his higher tariffs. Shares of Apple skyrocketed, climbing 15% for the stock’s best day since 1998 and adding more than $400 billion to Apple’s market cap. The rally ended Apple’s four-day slide during which time the stock dropped 23%, its worst such stretch since 2000. Shares of Tesla also gained 22% for its best day since 2013, Nvidia rose nearly 19%, Meta popped almost 15% and Amazon climbed 12%. Microsoft and Alphabet both gained about 10% each.
4. House of cards
So far, China has responded to Trump’s tariffs with retaliatory duties of their own. But that may not be the only way Beijing can punch back. “If China wanted to hit us hard, they could unload Treasurys. Is that a threat? Sure it is,” said Guy Cecala, executive chair of Inside Mortgage Finance. Foreign countries owned $1.32 trillion worth of U.S. mortgage-backed securities (MBS) as of the end of January, according to Ginnie Mae, and China is one of the top holders. Beijing already began selling some U.S. MBS last year. If it were to accelerate those sales — and if other top holders like Japan were to follow — mortgage rates could rise even further than they are now.
5. Ballpark figure
Juan Soto, then of the New York Yankees, in action during the sixth inning against the Seattle Mariners at Yankee Stadium in the Bronx borough of New York City on May 22, 2024.
Major League Baseball is the only major U.S. sports league without a salary cap, but that could change at the end of next year. As the league prepares a new Collective Bargaining Agreement with players, MLB officials have discussed adding both a salary cap and a salary floor, people familiar with the matter told CNBC. The Major League Baseball Players Association has long opposed the move and says its position remains the same. But advocates for a salary cap say limitless and disproportionate spending amongst teams has created a competitive imbalance, reducing fan enjoyment and making it hard for small market teams to keep star players. Indeed, the delta between the highest and lowest spending teams has reached an all-time high. This season, the New York Mets are spending $323 million on its players. The Miami Marlins are spending just over $67 million.
— CNBC’s John Melloy, Hakyung Kim, Yun Li, Sean Conlon, Ari Levy, Dan Mangan, Kevin Breuninger, Jeff Cox, Christina Wilkie, Erin Doherty, Ruxandra Iordache, Samantha Subin, Kif Leswing, Diana Olick, Alex Sherman and Lillian Rizzo contributed to this report.