MarketS&P 500 surged 9.5%, Nasdaq jumped 12% after Trump paused most tariffs

 

On April 10, 2025, the Indian stock market, including the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), remained closed in observance of Mahavir Jayanti. This annual holiday honors the birth of Lord Mahavir, the 24th Tirthankara in Jainism. Consequently, there were no trading activities across all segments, including equities, derivatives, and commodities, on this day. 

 

Global Market Reactions to U.S. Tariff Announcements

 

While Indian markets were closed, significant developments occurred in global financial markets, primarily influenced by recent trade policy shifts in the United States. On April 9, 2025, U.S. President Donald Trump announced a 90-day pause on most of the newly introduced "reciprocal" tariffs, reducing them to a baseline of 10%. However, tariffs on Chinese imports were increased to 125%, escalating trade tensions between the two largest economies. 

 

Impact on U.S. Markets

 

The announcement led to a historic surge in U.S. stock markets. The Nasdaq Composite recorded a 12% increase—the largest since 2001—while the S&P 500 rose by 9.5%, and the Dow Jones Industrial Average jumped 7.9%, marking its largest point gain ever with a 2,963-point rise. Investors responded positively to the temporary easing of trade tensions, although concerns remained regarding the intensified measures against China.


Asian Markets' Response

 

Asian markets mirrored the optimism seen in the U.S. Japan's Nikkei 225 surged by 8.2%, reflecting investor relief over the tariff pause. Other Asian indices also experienced significant gains, buoyed by hopes of reduced trade barriers and improved global economic prospects. 


Implications for the Indian Market

 

Given the interconnected nature of global financial markets, the developments in the U.S. and other Asian markets are likely to influence Indian equities when trading resumes on April 11, 2025. The positive sentiment stemming from the tariff pause may lead to a bullish opening for Indian indices, particularly in sectors sensitive to international trade dynamics.​

 

Key Factors to Watch

 

As Indian markets prepare to reopen, several factors merit close attention:

Global Trade Developments: The escalation of tariffs on Chinese goods to 125% and China's potential retaliatory measures could have broader implications for global trade. Investors should monitor any further policy announcements or negotiations that may impact market sentiment.​

Sectoral Impacts: Export-oriented sectors, such as information technology and pharmaceuticals, may react to changes in trade policies and currency fluctuations. Companies with significant exposure to U.S. and Chinese markets could experience volatility based on the evolving trade landscape.​

Commodity Prices: Global commodity prices, including crude oil, may respond to shifts in trade policies and economic forecasts. Fluctuations in these prices can influence related sectors within the Indian market, such as energy and manufacturing.​

Foreign Institutional Investments (FII): The response of foreign institutional investors to global developments will be crucial. An increase in FII inflows could bolster market confidence, while outflows might indicate risk aversion.​

The temporary pause on most U.S. tariffs has injected optimism into global markets, leading to significant rallies in major indices. As Indian markets reopen post-Mahavir Jayanti, investors should remain vigilant, considering both the opportunities presented by improved trade sentiments and the risks associated with ongoing U.S.-China trade tensions. A balanced approach, focusing on both global cues and domestic fundamentals, will be essential in navigating the current market environment.