The New York stock market surged on Wednesday.
Investor sentiment dramatically recovered as U.S. President Donald Trump announced a 90-day suspension of reciprocal tariffs for over 75 countries, including South Korea.
The so-called “Trump put,” the expectation that Trump would intervene to prevent market collapse, proved effective.
Trump explained that he suspended the tariffs since “people seemed too afraid.”
The New York stock market’s rally was the third steepest since World War II, with the Nasdaq index soaring over 10%.
Tesla led the charge with a 23% increase, while Nvidia rose 19%, driving the M7 big tech stocks higher.
Surge
The New York stock market, which had been volatile due to escalating U.S.-China trade tensions, abruptly shifted course in the afternoon when Trump announced the 90-day suspension of reciprocal tariffs.
Despite raising the tariff rate on China to 125% and implementing it immediately, investors celebrated Trump’s market intervention.
Technology stocks saw the largest gains.
The tech-heavy Nasdaq skyrocketed by 1,857.06 points (12.16%) to reach 17,124.97.
The broader Standard & Poor’s 500 index surged by 474.13 points (9.52%) to close at 5,456.90.
The Dow Jones Industrial Average, comprising 30 blue-chip stocks, climbed by 2,962.86 points (7.87%) to 40,608.45.
During the global financial crisis, the S&P 500 recorded its largest single-day increase since October 2008. The Dow saw its biggest daily gain since March 2020 and the Nasdaq since January 2001.
Gina Bolvin, president of Bolvin Asset Management Group, told CNBC, “This is the turning point we’ve been waiting for.”
The CBOE Volatility Index (VIX), often called the ‘Wall Street Fear Index,’ plummeted by 18.71 points (25.72%) to 38.87.
Tesla Leads the M7 Tech Surge
The M7 big tech stocks led the surge.
Tesla, in particular, saw a significant 23% increase, completely erasing its losses from the past four days.
The temporary retreat of high tariffs, which had been criticized by Elon Musk, Tesla’s CEO and head of the Trump administration’s Department of Government Efficiency (DOGE), restored investor confidence in Musk.
The tariff suspension suggests that Trump has sided with Musk, who had been engaged in a heated exchange with Peter Navarro, Trump’s senior trade and manufacturing advisor, over high tariffs.
Tesla’s stock price skyrocketed by $50.34 (22.69%) to $272.20, recovering its 21.54% drop over the previous four days, March 3 to 8.
Nvidia, Apple, and Big Tech Join the Rally
Nvidia surged by $18.03 (18.72%) to $114.33.
Investors jumped in for a bargain, with Cathie Wood’s ARK Innovation ETF purchasing 343,657 Nvidia shares at low prices on Monday and Tuesday, causing the stock to soar.
Although concerns remain about the impact of the escalating U.S.-China trade war on Nvidia’s Chinese business, which accounted for over 20% of its revenue last year, investors were initially enthusiastic.
Apple reclaimed the top spot in market capitalization in just one day.
Apple closed at $198.85, up $26.43 (15.33%), while Microsoft (MS) ended the day at $390.49, up $35.93 (10.13%), pushing Microsoft back to second place in market cap.
Apple’s market capitalization reached $2.99 trillion, surpassing Microsoft’s $2.90 trillion.
Apple’s stock price increase marked its largest gain since January 1998.
Alphabet rose by $14.48 (9.88%) to $161.06, while Amazon climbed by $20.44 (11.98%) to $191.10.
Meta Platforms closed at $585.77 after a surge of $75.32 (14.76%).
