US stocks surged on Tuesday, reversing three days of market carnage, after cheap stocks and signs of trade negotiation sent markets surging ahead of a planned tariff escalation at midnight.
The Dow Jones Industrial Average rose 930 points, or 2.45%, in midday trading, while the S&P 500 gained 2.3% and the Nasdaq Composite rose 2.5%. The surge came as investors sought buying opportunities after a period of uncertainty.
Analysts say that historic market rebounds tend to be clustered with massive declines, as investors with fear-of-missing-out (FOMO) worry they could miss out on a rally. However, despite the optimism, markets are still coiled for a rebound and are poised for any updates from the White House that might signal Trump is negotiating his trade policy.
The VIX index, Wall Street’s fear gauge, sank 13% after spiking to historic levels over the past two sessions. China has stood up to Trump, refusing to back down from its retaliatory tariffs despite threats of increased tariffs if it doesn’t comply.
Recession fears remain a concern, with multiple Wall Street banks warning that an escalation of the trade war would likely lead to a US and global recession this year. Despite this, some in the Trump administration are optimistic about the market’s prospects.
The surge in markets comes as investors await developments on the trade front, but there is no guarantee that stocks will remain buoyant. The escalating trade war between the United States and China is turning into a high-stakes game of chicken, with both countries refusing to back down.
Source: https://edition.cnn.com/2025/04/08/investing/stock-market-dow-tariffs/index.html