Dow Jones Industrial Average rockets higher on tariff suspension

• The Dow Jones soared 7% on Wednesday after the Trump administration delayed its lopsided "reciprocal" tariffs.
• A flat 10% across-the-board tariff is still in effect, and China tariffs are still going to 125%.
• Market sentiment has entirely reversed course, and rate cut bets are plummeting.

The Dow Jones Industrial Average (DJIA) skyrocketed on Wednesday, climbing over 2,200 points and reclaiming the 40,000 major price handle after the Trump administration announced it would once again pivot away from most of its recent tariff threats. According to social media posts by US President Donald Trump, lopsided "reciprocal" tariffs are being reduced to just 10% across the board for the next 90 days

US tariffs on China are still in effect, however, and are set to rise to 125% after China slapped a counter-retaliatory tariff of 84% on all goods imported from the US in a move that almost exclusively targets US agriculture. The US's last-minute tariff pivot comes just after the European Union (EU) also approved its own retaliatory tariff package that would have seen a 25% import duty imposed on US goods.

Trump announces a 90-day pause on reciprocal tariffs

The Dow Jones soared over 10% bottom-to-top on Wednesday, rising 3,740 at its peak before settling to a more reasonable 6.2% single-day rebound. The Standard & Poor's 500 (S&P) index rallied 375 points to climb 7.5%, while the Nasdaq Composite rose 1,400 points, netting 9.4% on Wednesday.

Rate cut bets are getting pummeled by the tariff delay news, and rate traders now expect far fewer rate cuts through the rest of 2025. According to the CME's FedWatch Tool, interest rate swap traders now expect a total of 75 bps in interest rate cuts through the remainder of the year. A first Fed rate cut is still expected at the Fed's June rate call meeting, but a first rate cut in July remains a firmer bet.

Dow Jones price forecast

Intraday price action has been decimated by more late-stage tariff policy pivots from the Trump administration, and the Dow Jones has gone from 37,000 to 40,000 within a single trading session. Significant technical resistance remains at the 200-day Exponential Moving Average (EMA) near 41,900, however bidders will first need to crack through a soft resistance zone from March's swing low into 41,000.

Dow Jones daily chart