President Donald Trump announced a pause on some of his tariffs, which subsequently influenced significant market reactions as big banks prepared to discuss their earnings guidance. His announcement resulted in notable increases across major indices: the Nasdaq closed with a 12% rise, while the S&P 500 went up by more than 9%. Many individual stocks experienced gains, such as Delta Air Lines with a 23% increase, Nvidia growing over 18%, and Apple rebounding by 15% after previous concerns over iPhone pricing affected its value.
The sentiment in stock markets shifted to a more optimistic outlook following President Trump’s communication on social media concerning a pause in tariffs, accompanied by remarks from Treasury Secretary Scott Bessent who assured that the U.S. is not engaged in a trade conflict. Despite this temporary reprieve from recent market volatility, a sense of uncertainty persists concerning prospects over the next 90 days.
Jake Schurmeier, a portfolio manager at Harbor Capital and former member of the Federal Reserve Bank of New York’s Markets Group, commented that portfolio managers are working to understand how future negotiations might unfold, noting that they have a 90-day window before revisiting these challenges.
In a recent announcement from the Rose Garden, President Trump introduced multiple tariffs, marking a noticeable exceedance of expected levels, which had previously been factored into trade policy by investors. Markets experienced downturns in trading days that followed this announcement, leading to discussions of a potential recession, a concern highlighted by Jamie Dimon, CEO of JPMorgan Chase. Dimon indicated that recession fears contributed to Trump’s decision to temporarily halt tariffs.
Michael Orlando, of the J.P. Morgan Center for Commodities and Energy Management, noted that the tariff pause provided some relief from the uncertainty affecting equity prices. However, a key development was the shifting perception of U.S. Treasuries, which transitioned from safe investments to potentially risky ones.
Orlando stated that the cooling-off period helped mitigate concerns regarding the President’s understanding of trade benefits. Yet, uncertainty remains about future developments.
Schurmeier highlighted the significance of upcoming earnings calls where major companies, alongside their CEOs and CFOs, would discuss how they are managing tariff impacts. This period presents an opportunity for companies to share any unfavorable news.
Attention will also focus on how major banks’ leaders, including Dimon, frame their clients’ reactions and perspectives on mergers and acquisitions, as well as their commitment to providing credit amidst current conditions. These insights will help gauge business confidence.
In relation to China, potential impacts of further retaliation are under scrutiny following Trump’s tariff increase on Chinese goods to 125%. Idanna Appio, from First Eagle Investments, emphasized the critical nature of the U.S.-China relationship, expressing concern about potential geopolitical tensions arising from economic frictions.
Appio pointed out that the U.S. economy remains fragile, with a recession factored into her forecasts due to the ongoing uncertainty, notwithstanding the adjustments to tariff scales. She expressed concerns about potentially revisiting these economic challenges in the near future, characterizing the situation as volatile.
This report initially appeared on Fortune.com.
