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DLNews Biz:

U.S. stock markets surged Tuesday after President Donald Trump announced a surprise 90-day pause on new tariffs for most countries—while simultaneously escalating duties on Chinese imports to a staggering 125%. The mixed message jolted global investors and reignited debates over the direction of U.S. trade policy.

Like a floor trader catching a falling phone only to see the ticker turn green, Wall Street’s mood flipped from anxious to optimistic—if only temporarily—as investors tried to parse the double-edged trade maneuver.

The Dow Jones Industrial Average jumped 368 points, or 0.94%, closing at 39,128. The S&P 500 rose 1.2% to 5,240, while the tech-heavy Nasdaq led the rebound with a 1.7% gain. Meanwhile, Hong Kong’s Hang Seng dropped 0.8%, and Shanghai’s Composite shed 1.3% amid tariff fears.

Markets responded to a pair of late-morning posts from President Trump, who revealed a 90-day halt on new tariffs—calling it a “Reciprocal Pause”—excluding China, where he sharply increased duties in response to what he called “a lack of respect” for global markets. The announcement was unexpected and fueled both relief and concern.

“Investors are reacting to a perceived easing of global trade friction, even as tensions with China reach a new high,” said Megan Roth, Senior Trade Analyst at Polaris Global Investments. “It’s a classic Trump maneuver—give with one hand, escalate with the other.”

Chief Economist at Tradeline Advisors, Jeffrey Dalton, added, “The markets are betting on a negotiated breakthrough with Europe and Latin America. But China? That’s another battlefield entirely.”

European markets ticked upward on hopes of exemption from new U.S. tariffs. Germany’s DAX climbed 0.7%, and the U.K.’s FTSE 100 added 0.6%. In contrast, Asian indices slipped amid fears of an escalating trade standoff between Washington and Beijing.

The White House has not clarified which nations are included in the 90-day tariff pause. The Office of the U.S. Trade Representative confirmed talks with EU officials and hinted at a cooperative framework. Meanwhile, Chinese officials condemned the 125% tariff hike as “irrational economic aggression” and vowed countermeasures.

Trump’s messaging framed the China decision as punitive and strategic: “The days of ripping off the U.S.A. are over,” he wrote.

For Consumers: Expect continued price stability on imported goods from most regions. However, products from China, especially electronics and home appliances, may see sharp increases by summer.
For Businesses: Relief may come for manufacturers reliant on European and South American suppliers. Those sourcing from China, however, face rising costs and potential delays.
For Investors: Volatility remains high. Watch for movement in the manufacturing, tech, and shipping sectors. Defense and domestic production stocks may benefit from the new tariff wave.

As the global chessboard shifts again, all eyes turn to Beijing’s next move and the White House’s clarity on tariff exemptions. For now, markets are riding a wave of relief, with one wary eye on the rising tide of U.S.–China tensions.