4E Observation: Trump's Suspension of Tariffs Causes Market Surge, Is It a Reversal or a Temporary Breather?
Trump suddenly announced a 90-day suspension of tariffs on countries that do not take retaliatory actions. The U.S. stock market experienced an epic rebound, and the cryptocurrency market celebrated simultaneously. However, behind the frenzy, uncertainty and a wait-and-see attitude in the market remain strong.
Policy U-Turn: From Maximum Pressure to Strategic Compromise
In the weeks prior, Trump repeatedly emphasized applying maximum pressure on trade partners through "reciprocal tariffs," with senior White House officials suggesting that this strategy would force countries to make substantial concessions in negotiations. However, in just one night, the policy direction shifted from a comprehensive increase in tariffs to a pause and a reduction of the tax rate to 10%, catching global markets off guard. U.S. Treasury Secretary Mnuchin later explained that this move was not a capitulation to market pressure but rather a way to create a time window for subsequent negotiations; Commerce Secretary Ross optimistically stated that "the world is ready to work with Trump."
Market interpretations varied. Many viewed this as a pragmatic adjustment by Trump in response to financial market pressures; however, others argued that this strategic "emergency brake" was merely a delaying tactic and could not change his unpredictable policy style.
U.S. Stocks Soar to Record Highs, Cryptocurrencies Surge
Following the announcement of the tariff pause, global markets reacted swiftly. The three major U.S. stock indices recorded rare single-day gains: the Dow Jones Industrial Average soared 7.87%, marking its largest single-day increase since March 25, 2020; the S&P 500 rose 9.52%, achieving its best single-day performance since 2008; and the Nasdaq Composite jumped 12.16%, recording its second-largest single-day gain since January 2001. Technology stocks performed particularly well, with the seven tech giants index surging 14%, adding $1.85 trillion to their total market capitalization in a single day.
Meanwhile, the cryptocurrency market also experienced a frenzy, with investor panic quickly reversing. Bitcoin rose 8.25% in a single day, Ethereum broke through $1,680 with an increase of nearly 14.6%, and other altcoins generally surged, leading to a 9% increase in total cryptocurrency market capitalization within 24 hours. 
A New Turning Point or Prelude to Greater Chaos?
Despite the market surge, institutional concerns have not dissipated. Currently, most analysts generally believe that this "stay of execution" tariff policy has not truly eliminated uncertainty; rather, it may bring more chaos and could be seen as a political expedient rather than a rational economic decision. Many Wall Street traders candidly stated that market fluctuations have become an appendage to presidential moods, and we are essentially trading "Trump options," whose price movements depend on whether Trump wakes up the next day and suddenly overturns the previous day's policy.
The game of tariffs among countries still carries significant uncertainty, and the business community faces challenges as well. In the absence of policy coherence and certainty, many companies are forced to pause plans and reassess supply chain costs and revenue impacts. This suggests that U.S. stocks may still experience high volatility in the future.
Data from Morgan Stanley's monitoring indicates that institutional investors are adjusting their holdings, allocating more funds to safe-haven assets such as gold and U.S. Treasuries. This defensive positioning reflects a cautious attitude among professional investors regarding future market conditions.
Trump's "Flexibility" and Market Vulnerability
Trump's abrupt policy shift demonstrates a high degree of "flexibility" in his decision-making, while also exposing the fragility of global capital markets. In the short term, investors may enjoy the dividends brought by this policy loosening; however, in the long term, when market trends depend on Trump's next tweet or sudden decision, this typical "sentiment-driven trading" is destined to be unsustainable.
In the next 90 days, global attention will focus on Trump's negotiation strategies and subsequent policy directions. For investors, this is not just a capital game but also a psychological battle against uncertainty. Caution may be the most rational choice at this moment.
4E, as the global partner of the Argentina national team and the only recommended trading platform, supports trading in cryptocurrencies, stock indices, bulk gold, foreign exchange, and other assets. Recently, it launched a USDT stablecoin financial product with an annualized return of 8%, providing investors with a potential hedging option. 4E reminds you to pay attention to market volatility risks and to allocate assets wisely.
