Dow explodes 3,000 points higher, S&P 500 has best day since 2008 as Trump pauses most reciprocal tariffs

As the S&P 500 approached a 20% drop over the past week, investors made clear one thing they thought could stop the selling.

President Trump needed to back off the tariffs. Given that the president jacking up tariffs to their highest level in a century had been the primary catalyst for one of the worst three-day sell-offs in the S&P 500 since World War II, investors felt the only real lever to stop the bleeding was a changing of tides from Trump.

“We need to see some evidence of some negotiation very, very quickly,” Fundstrat’s global head of technical strategy, Mark Newton, told Yahoo Finance on Tuesday.

It came on Wednesday via Truth Social with a few short words.

“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” read part of Trump’s Truth Social post.

Stocks are ripping higher now. There is plenty left to still consider regarding the tariff pause, the direction from here, and the impact of 125% tariffs on China.

But for now, at least, one investor takeaway is clear: The so-called Trump put — a level of downside in markets or the economy that investors believe will cause the president to step in — appears to be alive and well again.

“The most important thing we’ve just learned is that when faced with the near inevitability of an impending recession (and a wipeout at the midterms), the President will blink,” Justin Wolfers, an economist and senior fellow at the Brookings Institution wrote on X. “That’s usually obvious, but markets were consumed with fear that it wasn’t true this time.”