Bond Market Reverses on Trump Tariff Pause: Tesla Stock (TSLA) Soars 22%, S&P 500 Up 9%
US President Trump announced that tariffs would be frozen excluding China, which sent the S&P 500 9% up, and Tesla 22% higher, while the bond market retreated after the surge of the last few days.
Stocks Reignite as Tariff Freeze Sparks Relief Rally
Markets saw a dramatic reversal today after U.S. President Donald Trump announced a three-month freeze on reciprocal tariffs for countries choosing not to retaliate. The move brought much-needed clarity and eased investor concerns, fueling a powerful rally across Wall Street. After suffering a steep 22% drop earlier this week, the S&P 500 surged over 9% on Tuesday, reclaiming roughly half of its recent losses.
The Dow Jones Industrial Average jumped 7.5%, while the tech-heavy Nasdaq roared ahead with a 12% gain, led by a rebound in mega-cap stocks and improved risk appetite. Equity markets have been under pressure for months amid growing trade tensions, inflation concerns, and elevated interest rates. But today’s shift in sentiment marked a turning point—at least temporarily.
S&P 500 Reclaims Key Levels
The S&P 500’s rally saw the index break above key technical levels. After touching a session high of 5,443, the SPX pushed past the crucial 5,400 resistance area. The next significant target lies around 5,500, representing a 50% retracement from the 2025 highs to this year’s lows.
Traders pointed to the 4-hour chart, where the index successfully filled a gap from last week’s selloff. The upside momentum suggests potential for further gains if tariff tensions remain on pause and macro data holds steady.
Tesla Accelerates After Support Holds
Tesla (TSLA) was among the day’s top performers, surging 22% following Trump’s tariff announcement. The stock had already shown signs of resilience last week, gaining 6% even as broader tech names came under pressure.
After finding a strong support base around $220, Tesla opened today’s session at $223 and quickly climbed to $268. The surge comes despite a weak Q1 showing, which included a drop in global EV sales compared to the previous year.
The optimism tied to tariff relief appears to have reignited interest in Tesla, especially as the company benefits from its diversified supply chain and brand strength in the EV space. While challenges remain, including competition and slowing international sales, investors welcomed the reduced regulatory uncertainty.
Bond Market Volatility Continues
While equities bounced, the bond market experienced another volatile day. Mortgage rates have climbed to 7% amid persistent inflation pressures. Three-year U.S. Treasury yields surged from 4.30% last Thursday to nearly 5% today before retreating sharply to 4.719%—a swing that erased most of the session’s gains.
The volatility underscores ongoing uncertainty around Federal Reserve policy and broader economic conditions. Despite today’s equity rally, yields remain elevated, suggesting that inflation and rate expectations continue to play a dominant role in shaping the macro narrative.
Outlook
Today’s relief rally shows how sensitive markets remain to headline risk—particularly around trade and monetary policy. While the three-month tariff pause provides a breather, the underlying challenges—slowing growth, sticky inflation, and Fed policy uncertainty—remain in focus. For now, investors are taking a cautiously optimistic stance, hoping that calmer policy signals can sustain the rebound.
S&P 500 Live Chart
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