U.S. President Donald Trump on Sunday said he would be announcing the tariff rate on imported semiconductors over the next week, adding that there would be flexibility with some companies in the sector.
The president’s pledge means that the exclusion of smartphones and computers from his reciprocal tariffs on China likely will be short-lived as Trump looks to reset trade in the semiconductor sector.
“We wanted to uncomplicate it from a lot of other companies, because we want to make our chips and semiconductors and other things in our country,” Trump told reporters aboard Air Force One as he traveled back to Washington from his estate in West Palm Beach.
Trump declined to say whether some products such as smartphones might still end up being exempted, but added: “You have to show a certain flexibility. Nobody should be so rigid.”
Earlier in the day, Trump announced a national security trade probe into the semiconductor sector.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” he posted on social media.
The White House had announced the exclusions from steep reciprocal tariffs on Friday, creating some hope that the tech industry might escape being ensnared in the escalating conflict between the two nations and that everyday consumer products such as phones and laptops would remain affordable.
However, Trump’s commerce secretary, Howard Lutnick, earlier on Sunday made clear that critical technology products from China would face separate new duties along with semiconductors within the next two months.
Trump’s back-and-forth on tariffs last week triggered the wildest swings on Wall Street since the COVID pandemic of 2020. The benchmark Standard & Poor’s 500 index (.SPX), opens new tab is down more than 10% since Trump took office on January 20.
Lutnick said Trump would enact “a special focus-type of tariff” on smartphones, computers and other electronics products in a month or two, alongside sectoral tariffs targeting semiconductors and pharmaceuticals. The new duties would fall outside Trump’s so-called reciprocal tariffs, under which levies on Chinese imports climbed to 125% last week, he said.
“He’s saying they’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick said in an interview on ABC’s “This Week,” predicting the levies would bring production of those products to the United States.
Beijing increased its own tariffs on U.S. imports to 125% on Friday in response. On Sunday, before Lutnick’s comments, China said it was evaluating the impact of the exclusions for the technology products implemented late on Friday.
“The bell on a tiger’s neck can only be untied by the person who tied it,” China’s Ministry of Commerce said.
Billionaire investor Bill Ackman, who endorsed Trump’s run for president but who has criticized the tariffs, on Sunday called on him to pause the broad and steep reciprocal tariffs on China for three months, as Trump did for most countries last week.
If Trump paused Chinese tariffs for 90 days and cut them to 10% temporarily, “he would achieve the same objective in causing U.S. businesses to relocate their supply chains from China without the disruption and risk,” Ackman wrote on X.
‘CHANGES EVERY DAY’
Sven Henrich, founder and lead market strategist for NorthmanTrader, was harshly critical of how the tariff issue was being handled on Sunday.
“Sentiment check: The biggest rally of the year would come on the day Lutnick gets fired,” Henrich wrote on X. “I suggest the administration figures out who controls the message, whatever it is, as it changes every day. U.S. business can’t plan or invest with the constant back and forth.”
U.S. Senator Elizabeth Warren, a Democrat, criticized the latest revision to Trump’s tariff plan, which economists have warned could dent economic growth and fuel inflation.
“There is no tariff policy – only chaos and corruption,” Warren said on ABC’s “This Week,” speaking before Trump’s latest post on social media.
In a notice to shippers, opens new tab late on Friday, the U.S. Customs and Border Protection agency published a list of tariff codes excluded from the import taxes. It featured 20 product categories, including computers, laptops, disc drives, semiconductor devices, memory chips and flat panel displays.
In an interview on NBC’s “Meet the Press,” White House trade adviser Peter Navarro said the U.S. has opened an invitation to China to negotiate, but he criticized China’s connection to the lethal fentanyl supply chain and did not include it on a list of seven entities – the United Kingdom, the European Union, India, Japan, South Korea, Indonesia and Israel – with which he said the administration was in talks.
Trade Representative Jamieson Greer said on CBS’s “Face the Nation” that there were no plans yet for Trump to speak to Chinese President Xi Jinping on tariffs, accusing China of creating trade friction by responding with levies of its own. But he expressed hopes for some non-Chinese deals.
“My goal is to get meaningful deals before 90 days, and I think we’re going to be there with several countries in the next few weeks,” Greer said.
Ray Dalio, the billionaire founder of the world’s biggest hedge fund, told NBC’s “Meet the Press” that he was worried about the United States sliding into recession, or worse, as a result of the tariffs.
“Right now we are at a decision-making point and very close to a recession,” Dalio said on Sunday. “And I’m worried about something worse than a recession if this isn’t handled well.”
Stock futures rose Sunday after a temporary reprieve from tariffs on electronic imports from China by the Trump administration.
Dow futures were up 0.5%, or 212 points. The S&P 500 futures rose 0.75%, while the tech-heavy Nasdaq Composite futures gained 1.26%, as of 6:18 pm ET.
The Trump administration late Friday exempted electronic imports from reciprocal tariffs; any of those goods manufactured in China — like computers, phones and semiconductors — would still be subject to the 20% tariff Trump previously imposed on Chinese goods.
The gains come after stocks have seesawed wildly in recent days, as President Donald Trump has levied massive tariffs on US trading partners, then backed off many of those import taxes. Still, confusion about how permanent or temporary some tariff moves could be has stoked uncertainty among investors and kept stocks, the dollar and even US Treasuries under pressure.
Tech giants like Apple (AAPL), Microsoft (MSFT) and Nvidia (NVDA) rely on Chinese manufacturing, and the reciprocal tariffs would have made goods like iPhones and other consumer products more expensive.
But Commerce Secretary Howard Lutnick said Sunday that the exemption was “not permanent.” Other administration officials said another slate of tariffs could be imposed after an investigation into the national security effects of semiconductor imports.
Trump posted to his Truth Social platform that “NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!”
The back-and-forth on tariffs has caused many investors and others to hold off on major decisions until they get clarity.
“Investors will not invest in the United States when Donald Trump is playing ‘red light, green light’ with tariffs and saying, ‘Oh, and for my special donors, you get a special exemption,’” said Massachusetts Democratic Senator Elizabeth Warren on CNN’s “State of the Union.”
Trump has imposed various tariffs in recent weeks, after repeatedly postponing tariffs on Canada, Mexico and automotive imports. A baseline tariff of 10% went into effect on all countries, and higher rates were imposed on roughly 60 countries deemed the “worst offenders,” including tariffs on Cambodia (49%), Vietnam (46%) and the European Union (20%). Stocks plunged on April 3 after the news, with two consecutive sessions of sell-offs that wiped nearly $6 trillion in market value and continued with another volatile day on Monday, April 7, as the tariff chaos continued.
General Motors’ all-electric CAMI Assembly plant in Ontario is halting production of BrightDrop delivery vans, Unifor said Friday. Unifor is Canada’s largest private sector union, representing 320,000 workers.
The company will initiate temporary layoffs starting April 14 and production will stall for three weeks, Mike Van Boekel, plant chair for Unifor Local 88, which represents hourly workers at CAMI, told the Detroit Free Press.
Workers will return for two weeks in May for limited production, and then the factory will close for another 20 weeks. During this downtime, GM plans to complete retooling work to prepare the facility for production of the 2026 model year of commercial electric vehicles.
CAMI Assembly had run two shifts while producing Chevrolet BrightDrop vehicles. When production resumes in October, Unifor said the plant will operate on a single shift for the foreseeable future — a reduction expected to impact 450 workers.
“This is devastating for our members,” Van Boekel told the Detroit Free Press. “We are losing these shifts indefinitely.”
About 1,200 Local 88 members work there assembling Chevrolet BrightDrop EVs and constructing battery modules and packs.
“This is a crushing blow to hundreds of working families in Ingersoll and the surrounding region who depend on this plant,” Unifor National President Lana Payne said in the statement. “General Motors must do everything in its power to mitigate job loss during this downturn, and all levels of government must step up to support Canadian autoworkers and Canadian-made products.”
GM Canada confirmed CAMI is making operational and employment adjustments to balance inventory and align production schedules with current demand.
“GM remains committed to the future of BrightDrop, and the CAMI plant and will support employees through the transition,” the company said in a statement emailed to the Free Press. “This adjustment is directly related to responding to market demand and rebalancing inventory. Production of BrightDrop and EV battery assembly will remain at CAMI.”
Many hurdles
GM’s struggles with BrightDrop inventory come less than a year after the company folded the commercial vans into its Chevrolet brand in a bid to boost its performance.
GM has tried and failed to gain ground against competitors, including Ford and Rivian, in the electric van space, an effort further hindered by the vehicle’s high price tag. Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said the opaque trade environment spurred by President Donald Trump’s vacillating tariff announcements hardly aided the company’s U.S. sales projections.
“If there’s a tariff with Canada, how do you build any vehicle of volume there to be sold in the U.S.?” Fiorani asked.
Tariffs with Canada currently stand at 25%, though the auto industry is still seeking clarity about whether vehicles and parts compliant with the U.S.-Mexico-Canada Agreement are included.
GM produces BrightDrop 400 and BrightDrop 600 vans at CAMI Assembly, Canada’s — and GM’s — first full-scale all-electric vehicle manufacturing plant, which required massive investment to retool for EV production, including funding support from both governments. As the Free Press first reported, a glut of those slow-selling delivery vans has built up on both sides of the U.S.-Canada border.
CAMI produced 3,500 electric Chevrolet BrightDrop delivery vans last year — compared with nearly 200,000 Chevrolet Equinox crossovers the plant produced five years earlier — according to the Automotive News Data & Research Center. Of those, GM sold only 1,529, compared with Ford’s 12,610 E-Transit vehicles and Rivian’s 13,243 EDV.
GM reported sales of just 274 Chevrolet BrightDrop vehicles so far this year, up 7% from 256 sold in the first quarter of 2024.
Last month, a Free Press photographer captured images of hundreds of vehicles lining a Flint storage lot. Reuters published similar photos from CAMI in Ingersoll, Ontario.
CAMI reopened in late 2022 following a retooling period outfitting the facility for electric vehicle production. Production stalled again this year with a scheduled two-week shutdown to “align production schedules and balance inventory,” a GM spokesperson said in a statement.
Part of the reason BrightDrop sales are lagging in the U.S. is the comparatively high price tag to nearest competitors. Before incentives, the vehicles cost about $74,000. Ford’s E-Transit van with extended battery range, for example, is $51,600 — more than $20,000 cheaper — even before applying incentives.
Falling far short of projections
GM launched BrightDrop in 2021 as a wholly owned subsidiary with expectations its revenue would top $10 billion by 2030 with low-20% profit margins.
BrightDrop CEO Travis Katz said in 2022 that the company expected to be making 50,000 trucks a year starting in 2025 and bring in “a lot of revenue.” Katz left the company in late 2023 without specifying why as GM began reorganizing BrightDrop to function less independently and reduce costs.
“Make no mistake — the world is moving rapidly towards electrification. If Canada and the U.S. hit pause now, we may never catch up,” Payne said in the statement. “We risk surrendering our future unless we act decisively to support our own industry.”
The economics, and the lack of charging infrastructure, likely made it difficult for the company to find a foothold in the U.S. market, Fiorani said.
“It should be easy to convince a business that you can drive this thing. On paper, it’s a good idea. But business owners that are not used to taking risks won’t buy something they don’t understand fully,” he said. “In early 2020, when everybody was delivering things directly to their homes, this was a perfect vehicle for that market.”
DETROIT — As President Donald Trump’s 25% tariffs on imported vehicles remain in effect despite a pullback this week on other country-based levies, analysts are expecting massive global implications for the automotive industry due to the policies.
They’re expecting to see a drop in vehicle sales in the millions, higher new and used vehicle prices, and increased costs of more than $100 billion for the industry, according to research reports from Wall Street and automotive analysts.
“What we’re seeing now is a structural shift, driven by policy, that’s likely to be long-lasting,” Felix Stellmaszek, Boston Consulting Group’s global lead of automotive and mobility, told CNBC. “This may well be the most consequential year for the auto industry in history – not just because of immediate cost pressures, but because it’s forcing fundamental change in how and where the industry builds.”
BCG expects tariffs to add $110 billion to $160 billion on an annual run rate basis in costs to the industry, which could impact 20% of U.S. new-vehicle market revenues, increasing production costs for both U.S. and non-U.S. manufacturers.
The Center for Automotive Research, a Michigan-based nonprofit think tank, believes costs for automakers in the U.S. alone will increase by $107.7 billion. That includes $41.9 billion for Detroit automakers General Motors, Ford Motor and Chrysler parent Stellantis.
Both analyses take into account the 25% tariffs on imported vehicles implemented by Trump on April 3 as well as forthcoming levies of the same amount on automotive parts that are set to begin by May 3.
The 10-year Treasury yield climbed higher Friday, adding to its steep weekly rise, as dizzying trade moves by President Donald Trump caused investors to dump U.S. assets in favor of other global safe havens.
The benchmark 10-year Treasury yield advanced 9 basis points to 4.486%. It earlier jumped to its highest level since Feb. 13. The 2-year Treasury yield climbed 12 basis points on the day at 3.97%.
One basis point is equal to 0.01% and yields move inversely to prices.
The 10-year yield this week has risen more than 50 basis points this week after ending last week around 4%, marking one of the biggest spikes on record.
The move marks a stark reversal in how investors view Treasurys. Traditionally, investors have turned to U.S. debt as a safe haven during tumultuous times. That doesn’t appear to be the case this week as China and Japan appeared to be selling Treasurys amid the heightened trade tensions, traders speculated.
The move higher may have complicated the White House’s approach to trade.
Trump announced a 90-day tariff pause on most countries on Wednesday and reduced duties to a universal rate of 10%. The reprieve excluded China, which saw U.S. tariffs on Chinese imports rise to 145%. China struck back against the U.S. on Friday, raising its duties on American goods from 84% to 125%. While some administrations officials have said this reversal was always the plan, the dramatic spike in yields likely pressured them to pause.
“Scott Bessent is keeping a close eye on the bond market. He spoke to the White House and I know he is keeping his eyes on it,” the White House said on Friday.
Kevin Hassett, director of Trump’s National Economic Council also told CNBC on Thursday “the fact that the bond market was telling us, ‘Hey, it’s probably time to move,’ certainly would have contributed at least a little bit to that thinking.”
“But it wasn’t the bond market that made a panic move, because there was a very systematic, well-planned move that was just about to happen that just turned out to be the same time,” Hassett added.
Seema Shah, chief global strategist at Principal Asset Management, added that the bond market “likely struck a nerve with the Trump administration.”
“They have repeatedly emphasized their focus on bond yields and even celebrated last week when Treasury bond yields dipped below 4%. Low financing costs appear to be a key pillar of the Trump administration’s overall agenda, so the reversal in market trends, surging Treasury yields, undoubtedly caused significant concern in the White House,” Shah said.
Despite the pause, however, rates resumed their upward climb to the high levels that previously sparked concerned for the White House.
Americans are rarely this pessimistic about the economy.
Consumer sentiment plunged 11% this month to a preliminary reading of 50.8, the University of Michigan said in its latest survey released Friday, the second-lowest reading on records going back to 1952. April’s reading was lower than anything seen during the Great Recession.
President Donald Trump’s volatile trade war, which threatens higher inflation, has significantly weighed on Americans’ moods these past few months. That malaise worsened leading up to Trump’s announcement last week of sweeping tariffs, according to the survey.
“This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region and political affiliation,” Joanne Hsu, the survey’s director, said in a release.
“Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year,” she added.
The Federal Reserve and Wall Street are watching closely how souring sentiment translates into consumer spending, which accounts for about 70% of the US economy, and whether Americans lose faith that inflation will return to normal in the coming years.
Trump on Wednesday paused his massive tariff hike on dozens of countries for 90 days, but kept in place a 10% baseline duty for all imports into the US and separate tariffs on specific products and commodities. The so-called reciprocal tariffs, albeit short lived, were the sharpest increase in US duties ever on data going back 200 years, Fitch Ratings told CNN
China, however, wasn’t included in Trump’s tariff reprieve, continuing a contentious tit-for-tat between the world’s two largest economies that stretched into Friday, with Beijing jacking up its retaliatory tariffs on US imports to 125% from 84%.
The Michigan survey was fielded between March 25 and April 8, so it doesn’t capture respondents’ reaction to the recently announced tariff delay.
The relationship between sentiment and spending
In economics, surveys are referred to as “soft data” and measures capturing actual economic activity, such as retail sales, are known as “hard data.”
The soft data has clearly deteriorated because of Trump’s tariffs: The latest Michigan survey showed that “the share of consumers expecting unemployment to rise in the year ahead increased for the fifth consecutive month and is now more than double the November 2024 reading and the highest since 2009,” according to a release.
Yet, the hard data still looks decent. Employers continue to hire at a brisk pace and shoppers haven’t convincingly reined in their spending just yet, though retail sales have come in weaker than expected recently.
“Sometimes the surveys are very negative, but they keep spending,” Fed Chair Jerome Powell said last week at an event near Washington, DC. “People spent right through the pandemic and they spent right through this time of higher inflation.”
Still, the hard data could take a turn for the worse. New York Fed President John Williams said Friday at an event in Puerto Rico that he expects economic growth to slow sharply this year, pushing up unemployment, and for inflation to accelerate.
“Given the combination of the slowdown in labor force growth due to reduced immigration and the combined effects of uncertainty and tariffs, I now expect real GDP growth will slow considerably from last year’s pace, likely to somewhat below 1%,” he said.
Spending by better-off Americans has played a key role in keeping the US economy humming along these past few years, but the recent turbulence on Wall Street, triggered by Trump’s tariffs, is putting that under threat.
“Wealthy consumers’ stock market gains kept the economy growing in 2024 despite high prices, but the wealthy won’t feel confident enough to keep spending if this keeps up,” Bill Adams, chief economist at Comerica Bank, wrote in a recent analyst note.
Larry Fink, chief executive of BlackRock, the world’s largest asset manager, said Friday that today’s dense fog of uncertainty, triggered by Trump’s tariffs, is reminiscent of the 2008 global financial crisis.
“We’ve seen periods like this before when there were large, structural shifts in policy and markets — like the financial crisis, Covid-19 and surging inflation in 2022. We always stayed connected with clients, and some of BlackRock’s biggest leaps in growth followed,” Fink said.
JPMorgan Chase CEO Jamie Dimon echoed that sentiment, noting Friday after the bank released its latest quarterly earnings: “The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘trade wars.’”
A growing worry for the Fed
There’s one survey-based measure that matters a whole lot for the Fed: Americans’ perception of prices. It’s critical because they can be self-fulfilling — if people expect inflation to climb and remain elevated in the long run, they adjust their spending accordingly.
So far, that measure has been trending in the wrong direction: Expectations for inflation rates in the year ahead surged to 6.7% this month from 5% in March, the highest level since 1981, while expectations for the next five to 10 years climbed to 4.4% from 4.1%.
If people do lose faith that inflation will ever get back to normal in the coming years, that would make it extremely difficult for the Fed’s monetary policy to fight inflation.
“History teaches that when higher inflation expectations become entrenched, the road back to price stability is longer, the labor market is weaker and the economic scars are deeper,” Dallas Fed President Lorie Logan said Thursday at an event in Dallas.
Inflation expectations these days may be more susceptible than usual to becoming “un-anchored,” since consumers just experienced a period of high inflation, leaving many Americans particularly sensitive to elevated prices.
Google is hinting at some form of glasses integration with Android Auto through a new beta update, but there are some questions.
Android Auto 14.2 has just started rolling out in beta and while the update doesn’t seem to deliver any directly user-facing changes, the code behind-the-scenes hints at some potential updates coming in the future.
In our usual teardown of the latest update, we found strings that hint at a “default music provider” for Assistant (or, more likely, Gemini) and some continued work on swapping the word “car” for “vehicle,” which looks to extend to the phone screen pop-up that now tells you to “Continue setup on vehicle screen.”
The eye-catching strings in this version of Android Auto, though, discuss “Glasses.”
Specifically, there’s a new option titled “Glasses” and a string that mentions using “Glasses” with navigation.
<string name=”GLASSES_SETTING_TEXT”>Start navigation to launch Glasses</string>
This language is strange, though. “Start navigation to launch Glasses” seems to imply that “Glasses” is a feature of navigation, where one would rightly assume that this would have something to do with using some sort of glasses with navigation.
In a Hindi version of Android Auto 14.2 pulled by Android Authority, the translated version of this string reads “To view navigation on smart glasses, start navigation.” It’s still strange that the English version is so confusingly worded, but this gives us a slightly better idea of what Google has in mind.
With Android Auto’s purpose having always been to present information – whether that’s navigation, music, or messages – in a way that’s safer for drivers, smart glasses are certainly a logical next step, especially with Android XR products around the corner. Just this week, Google showed off its Android XR glasses prototype at an event, though there’s still no word on when these products will be hitting the market.
Consumer price inflation eased more than expected in March as President Donald Trump prepared to launch tariffs against U.S. trading partners, the Bureau of Labor Statistics reported Thursday.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, fell a seasonally adjusted 0.1% in March, putting the 12-month inflation rate at 2.4%, down from 2.8% in February.
Excluding food and energy, so-called core inflation ran at a 2.8% annual rate, having increased 0.1% for the month. That was the lowest rate for core inflation since March 2021.
Wall Street had been looking for headline inflation of 2.6% and core at 3%, according to the Dow Jones consensus.
Slumping energy prices helped keep inflation tame, as a 6.3% drop in gasoline prices helped drive a 2.4% broader decline in the energy index. Food prices climbed 0.4% on the month. Egg prices rose another 5.9% and were up 60.4% from a year ago.
Moreover, shelter prices, among the most stubborn components of inflation, increased just 0.2% in March and were up 4% on a 12-month basis, the smallest gain since November 2021. Used vehicle prices were off 0.7% while new vehicle costs increased just 0.1%, ahead of tariffs that are expected to hit the auto industry hard.
Airline fares declined 5.3% in March and motor vehicle insurance dropped 0.8% and prescription drugs fell 2%.
Stock market futures indicated a sharply lower open on Wall Street following the release, while Treasury yields also were negative.
The report comes a day after Trump’s stunning reversal of parts of his tariff plans as he announced a delay in some of the most aggressive of the duties put in place against dozens of nations. Instead, Trump let stand a 10% blanket levy on all imports announced last week and set a 90-day window during which the White House will negotiate the higher tariffs.
While Trump campaigned on bringing down inflation, progress had been slow to start 2025.
The president nevertheless has called on the Federal Reserve to lower interest rates. Central bank officials have expressed a reluctance to move with so much policy uncertainty in the air, and market pricing indicates the Fed will wait until June before lowering rates again.
The nature of the tariffs has led most economists to expect a significant bump in inflation, though that’s less clear now that Trump has opened the negotiation window.
“Today’s softer than expected CPI release feels backward looking given the large changes to trade policy seen in recent days,” said Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management. “Going forward the Fed is likely to face a difficult trade-off as tariff driven price increases start to feed through to the inflation data and activity remains soft.”
Futures market pricing after the CPI report indicated little change in market expectations for interest rates, with traders pricing in three or four cuts by the end of the year.
The Nasdaq Composite climbed more than 12% for its second best day ever as markets clawed back after a rocky few trading sessions spurred by President Donald Trump’s wide sweeping tariffs.
The tech-heavy index posted its best session since January 2001, when it rallied more than 14%.
Stocks skyrocketed across the board Wednesday after Trump announced a 90-day pause on tariffs for some countries. It followed multiple days of selling after the president’s aggressive tariff plans rattled global markets. Trump, however, said he would raise tariffs on China to 125%.
Apple soared more than 15% for its best day since January 1998. The iPhone maker is coming off its worst four-day trading stretch since 2000, which resulted in Microsoft unseating it as the most valuable company and a $774 billion drop in market value. Apple recovered its status Wednesday. The stock is down nearly 21% year to date.
Tesla and Nvidia popped more than 18% and 22%, respectively, while Meta Platforms jumped nearly 15%. Amazon rallied 12%, while Microsoft and and Alphabet rose about 10% each. Tesla posted its biggest one-day gain since May 2013 and its second-best day ever.
Semiconductor stocks that have struggled on fears that tariffs could stifle demand for many consumer products and slow the economy also jumped. While the sector has been excluded from the recent tariffs, levies could come in the future.
The VanEck Semiconductor ETF tracking the sector soared more than 17% for its best day ever. Advanced Micro Devices rocketed about 24%, while Intel jumped about 19%. On Semiconductor, Broadcom and Apple suppliers Qorvo and Skyworks Solutions were up more than 18% each.
President Donald Trump’s abrupt decision to reverse course on his sweeping tariff plan by announcing a three-month pause revealed his threshold for political pain: One week.
“They were getting yippy,” Trump said, explaining the rising criticism raining down on the White House over the last week. “They were getting a little bit yippy, a little afraid.”
Even for a president famous for his policy bobs and weaves, Wednesday’s announcement he was pausing his long-touted reciprocal tariffs for three months amounted to a stunning reversal of a plan he had appeared only a day earlier to be fully behind and came as his own trade representative was testifying on Capitol Hill to the benefits of the tariffs, seemingly catching him unaware of the pause.
Days of pressure from fellow Republicans, business executives and even his close friends hadn’t appeared to move Trump, who insisted last week: “MY POLICIES WILL NEVER CHANGE.”
By Wednesday, however, it had become evident the campaign to convince Trump to change course would not let up. It had also become plain after a sharp sell-off in US government bond markets — usually a safe corner for investors — that the economic ramifications of the president’s strategy were potentially catastrophic and worse than his advisers had previously predicted.
The growing alarm inside the Treasury Department over developments in the bond market was a central factor in Trump’s decision to hit pause on his “reciprocal” tariff regime, according to three people familiar with the matter.
Treasury Secretary Scott Bessent raised those concerns directly to Trump Wednesday in a meeting that preceded the pause announcement, underscoring concerns shared by White House economic officials who had briefed Trump on the accelerating selloff in the US Treasury market earlier in the day.
Calls to top White House advisors from key business community allies also increasingly focused on the troubling developments in the bond market as they made the case for Trump to pull back.
Trump had not yet made the decision to pause the dramatic new tariff rates when he was posting on social media about the stock market Wednesday morning, two of the people said.
But he acknowledged later in the afternoon that he’d been watching the bond market turmoil closely.
“The bond market is very tricky, I was watching it,” Trump told reporters. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”
Sitting in the Oval Office to tap out his announcement, Trump was joined by two advisers who had become dueling faces of the tariff plan: Bessent and Commerce Secretary Howard Lutnick.
“We didn’t have access to lawyers or – it was just wrote up. We wrote it up from our hearts, right? It was written from the heart, and I think it was well written too, but it was written from the heart,” Trump said afterward, describing a process driven more by impulse than mapped-out strategy.
Even as Trump calmed the markets – for now, at least – he also raised new questions by suggesting he would consider exempting some US companies from tariffs, saying he would make any such decisions “instinctively.”
Whirlwind Wednesday
It was another whirlwind Wednesday at the White House, with advisers scrambling to keep pace with the president’s decisions. He sought to take a victory lap after one of the most humbling retreats of his presidency, eager to take credit for the stock market gains Wednesday – without mentioning the record-setting, trillion-dollar losses over the last week.
“It’s the biggest increase in the history of the stock market. That’s pretty good,” Trump told reporters in the Oval Office. “If you keep going, you’re going to be back to where it was four weeks ago.”
If Trump was planning early Wednesday to pause his new tariffs after days of market turmoil, he did not reveal his intentions widely. Many White House officials heard of his decision at the same time the world learned, via post on Truth Social, that the new tariffs were on pause.
Even his own top trade official seemed only vaguely aware the change was possible by the time Trump announced the reversal on social media.
“It looks like your boss just pulled out the rug from under you and paused the tariffs,” Democratic Rep. Steven Horsford of Nevada told US Trade Representative Jamieson Greer during a hearing that was underway on Capitol Hill when Trump made his announcement. Greer had offered zero indication to that point the major shift was coming.
Bessent and other officials insisted the decision to pause the new tariffs on all nations except China was not a backdown; instead, they framed the move as all part of Trump’s master plan to bring nations to the negotiating table.
“It took great courage, great courage for him to stay the course until this moment,” said Bessent, who flew to Palm Beach last weekend for a lengthy discussion with Trump on the endgame of the tariffs.
Even as his advisers danced around it, though, the president acknowledged that the rising criticism, deepening angst and mounting losses in the financial markets contributed to his abrupt decision on Wednesday afternoon to impose a three-month pause on many of the tariffs.
“I thought that people were jumping a little bit out of line,” Trump told reporters.
Alarm over bond selloff
The administration’s economic team spent Wednesday morning intensely focused on the bond selloff that had intensified a day earlier and accelerated aggressively overnight, driving yields higher and, in effect, demonstrating the exact opposite of what would normally happen during such an unstable and volatile moment in the global economy.
Historically, Treasurys rally in moments of stock market selloffs as investors rush to shift assets to a global safehaven, the longstanding status due to the safety and liquidity provided by the US market.
Watching the inverse play out, then accelerate after unexpectedly weak demand at the first Treasury Department auction to take place since Trump’s announced his tariff regime, led to growing alarm even as Bessent dismissed it as “uncomfortable, but normal” in a Wednesday morning television interview.
But for Bessent, whose finance career was deeply intertwined with the bond market and who has been fixated on driving down the 10-year yields in his cabinet post, the alarm relayed by senior Treasury officials was understood and reflected in the later conversation with Trump.
The president, who is a close monitor of his own coverage on television, had seen even some of his close allies issue dire warnings about the prospects of a recession as a result of the tariffs. He was watching Fox Business channel on Wednesday morning when JPMorgan Chase CEO Jamie Dimon said a recession was “a likely outcome” of an escalating trade war resulting from Trump’s tariff policies.
“Markets aren’t always right, but sometimes they are right,” Dimon told Fox Business’ Maria Bartiromo.
Executives light up White House phones
Inside the White House, telephone calls had been coming quickly from business executives, Republicans and other allies of the President urging him to reconsider his tariffs, but they received little indication a pause was in the works.
Executives had been lighting up the phone lines of chief of staff Susie Wiles, Vice President JD Vance, and Treasury secretary Scott Bessent to make the case to Trump directly as trade hawks continued to promote Trump’s tariffs-at-all-costs approach on television as the market continued to sink.
Wiles, these sources said, had been particularly effective in convincing Trump that the market rout was costing considerable political capital that he would need for future agenda items, with lawmakers fielding increasingly angry constituent calls as the market continued sinking.
Bessent, whose conversation with Trump in Florida over the weekend focused on zeroing in on the overall goal of the tariffs, also appeared to assume more of a role in the public messaging, talking frequently about the dozens of countries now jockeying for trade deals.
“This was driven by the President’s strategy. He and I had a long talk on Sunday, and this was his strategy all along,” Bessent said on Wednesday.
Trump, however, acknowledged he’d been keeping a close eye on markets, calling their performance “glum” over the last few days.
A week after making a tariff announcement that upended the global trading system, the president stood outside the White House in front of three colorful race cars and reflected on what led to his retreat. He sought to take credit for a problem largely of his own making, saying his credibility was not eroded by the whiplash.
“You have to have flexibility,” Trump said. “I think in financial markets, because they change, look how much you change today.”
