Dow Soars 1,100 Points, Nasdaq & S&P Rally 3% as Tariff Talk Hopes Lift Wall Street

Global financial markets saw a wave of relief on Tuesday as stocks rebounded, clawing back some of the steep losses suffered since President Donald Trump escalated trade tensions last week.  

In early U.S. trading, the S&P 500 climbed 3.2%, recovering some ground, though still down 15% from its February high. The Dow Jones Industrial Average jumped 1,143 points (3%), while the tech-heavy Nasdaq rose 3.6% as of 9:35 a.m. ET.

The recovery wasn’t limited to Wall Street. Japan’s Nikkei surged 6%, Paris advanced 3.4%, and Shanghai added 1.6%. Crude oil prices edged higher after hitting their lowest levels since 2021, and Bitcoin rebounded above $79,000 after dipping below $76,000 the previous day.

Despite the upbeat session, analysts warn that volatility is likely to persist in the near term. No significant policy shift drove Tuesday’s bounce, but hopes that trade tensions may ease helped buoy sentiment.

Markets remain focused on the trajectory of President Donald Trump’s tariff strategy. Extended tariffs risk increasing prices for U.S. consumers and slowing economic growth. However, if talks yield a rollback, recession fears may ease.

Adding to the optimism, Trump on Monday said he sees the “confines and probability of a great DEAL” with South Korea after talks with the country’s acting president. He noted on social media that Seoul's “top TEAM is on a plane heading to the U.S.” and that several other countries were also eager to negotiate.

In Japan, Prime Minister Shigeru Ishiba appointed a trade negotiator to engage with the U.S., in line with an agreement reached with Trump, according to Japanese officials.

However, tensions remain high elsewhere. China reiterated that it will “fight to the end” and warned of countermeasures following Trump’s latest threat to escalate tariffs.

Still, such a global market rebound may not be entirely unexpected. Historically, some of the strongest single-day rallies have come during periods of heightened uncertainty. For instance, the S&P 500’s biggest gain since World War II was an 11.6% surge on Oct. 13, 2008, amid the global financial crisis. Just weeks later, it posted another gain of 10.8%.

This volatility reinforces why many financial advisors caution against market timing. Investors who exit the market during downturns risk missing these dramatic upswings.

Meanwhile, political voices within Trump’s own party are voicing concern. Republican Senator John Kennedy expressed support for improved trade deals but warned about the potential fallout.

“We don’t know if the medicine will be worse than the disease,” Kennedy said. “This is President Trump’s economy now.”

Trump, for his part, sent mixed signals—saying he remains open to negotiations that benefit the U.S. but also hinted at the possibility of maintaining some tariffs long-term.