What Does the 90-day Tariff Pause Mean for Markets?

On April 9, the White House announced a 90-day pause on reciprocal tariffs for countries that have not retaliated with higher tariffs on U.S. goods. Tariffs will continue at a 10% rate for these countries. There are a few key points to highlight:

• Notably, this excludes China which has imposed tariffs on U.S. goods, and the U.S. has escalated its tariff rate on Chinese goods to 125%.
• The initial market reaction to this news has been positive across all major indices, including some of the largest intra-day market moves since 2020.
• This is because the announcement signals the president is willing to negotiate and lower tariff rates, after a week of taking a hard-line stance on tariffs. This may mean that the escalating trade war that some investors fear is less likely.
• Despite this positive market move, it’s important to remain patient and maintain a longer-term perspective since the full impact of tariffs is still unknown. This is still a challenging environment for businesses to make investment and hiring decisions, and for consumers who could potentially face higher prices.

In times like these, headlines can change quickly. In just a week, the stock market has fallen to near-bear market levels before bouncing back somewhat. As always, it’s important to stay disciplined by sticking to a personalized financial plan, rather than react to day-to-day headlines.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.