The global financial markets collectively exhaled in early April 2025 when former President Donald Trump – now back in the Oval Office – dropped a policy bombshell during what traders call the “witching hour” of Wednesday afternoon. With a single press conference announcing a 90-day tariff ceasefire covering 75 nations, the administration sent Wall Street into the most euphoric rally since the pandemic recovery. What followed wasn’t just a market correction – it was a full-blown financial exorcism of trade war fears.
The Great Unwinding: Market Mechanics Explained
Like a construction crew dismantling tariff barriers brick by brick, traders went berserk the millisecond the news hit terminals. The Dow Jones Industrial Average didn’t just climb – it pole-vaulted 2,962 points (7.9%) in a single session, smashing its March 2020 stimulus rally record. But the real fireworks happened in tech land: the NASDAQ Composite’s 12.2% surge represented its second-largest percentage gain ever, with semiconductor stocks like NVIDIA and AMD leading the charge. Even old-economy sectors joined the party, as the S&P 500’s 9.52% jump ranked as its third-best daily performance since WWII. Market analysts described the moves as “a coiled spring finally released” after months of tariff uncertainty crushing corporate earnings forecasts.
The China Conundrum: Selective Economic Warfare
Here’s where the policy plot thickened – while extending olive branches to 75 nations, the administration simultaneously cranked up tariffs on Chinese imports by 15%. This schizophrenic approach created bizarre sectoral divergences: American steel producers tanked on reduced protectionism fears, while solar panel manufacturers soared on cheaper imported components. The bond market flashed warning signals too, with 10-year Treasury yields spiking 22 basis points as traders priced in potential inflation from both trade normalization and continued China friction. “It’s like watching a demolition crew work two sites simultaneously,” remarked Goldman Sachs’ chief strategist. “One team’s removing trade barriers with sledgehammers while the other’s building higher walls against China.”
Algorithmic Aftermath: How Machines Amplified the Move
Beneath the human drama, quant funds’ algorithms went haywire. High-frequency trading systems – programmed for gradual tariff implementations – suddenly had to price in a 90-day ceasefire. Market depth indicators showed liquidity evaporating momentarily as electronic market makers struggled to adjust. The CBOE Volatility Index (VIX) plummeted 38% in 90 minutes, triggering margin call cascades for volatility traders. “The machines started eating each other,” confessed a JPMorgan quant trader, describing how momentum algorithms kept buying even as fundamentals-based models screamed “overbought.” This algorithmic feeding frenzy accounted for nearly 30% of the day’s abnormal volume according to FINRA post-analysis.
As trading floors emptied past 4 PM ET, the numbers told a stark tale: $2.3 trillion in market cap created, retirement accounts resuscitated, and geopolitical risk premiums halved – all before dinner time. Yet seasoned traders kept antacids handy, remembering how previous Trump-era trade truces often unraveled. The real test begins now: whether this temporary tariff thaw can evolve into lasting trade policy, or if markets will soon face another demolition job when the 90-day clock expires. One thing’s certain – in today’s hyper-connected global economy, even temporary policy reprieves can move mountains of money faster than any construction crane.