Trump’s Tariff Pause Ignites Stocks: Invest Now?

The stock market is buzzing, and it’s no secret why. In April 2025, President Donald Trump announced a 90-day tariff pause for most countries, excluding China, setting a flat 10% reciprocal rate for others. By May 13, a U.S.-China agreement to cut tariffs sent Wall Street into a frenzy. The Nasdaq soared 9.8%, the Dow Jones climbed 6.9%, and the S&P 500 jumped 5.9%, hitting its highest level since early March. Investors are cheering, but is this rally a golden opportunity or a fleeting spark? Let’s break down the numbers, expert takes, and actionable steps for your money.

A Tariff Timeout That Moved Markets

Trade tensions between the U.S. and China have been a rollercoaster. High tariffs had nearly frozen business between the world’s two largest economies, with Trump himself noting on May 4 that the levies were so steep “we’ve essentially stopped doing business with each other.” His solution? A temporary tariff cut agreement, finalized by May 13, aimed at easing fears of a global trade war. The market’s response was swift. According to CNBC, the Nasdaq’s 9.8% surge reflected tech giants like Apple (AAPL, up 8.2% to $230.45) and Nvidia (NVDA, up 7.9% to $135.12) riding the wave of optimism. The Dow’s 6.9% gain lifted industrials like Caterpillar (CAT, up 6.5% to $360.20), while the S&P 500’s 5.9% climb signaled broad investor relief.

Why such a big reaction? The tariff pause included exemptions for key sectors—smartphones, computers, and chip-making equipment—directly boosting tech and manufacturing. The Wall Street Journal reported that these exemptions, combined with the Federal Reserve’s pledge to stabilize markets if needed, gave investors confidence to buy in. The S&P 500’s climb to 5,800 points, its highest since March, underscores the market’s bet on smoother trade ahead.

By the Numbers: Who’s Winning?

Let’s talk money. The rally wasn’t just headlines—it moved real dollars. Tech stocks led the charge, with the Nasdaq’s 9.8% gain translating to a $2.1 trillion increase in market cap, per Bloomberg data. Apple’s stock jump added $250 billion to its valuation, while Nvidia’s rise pushed its market cap past $3.3 trillion. Industrials also cashed in, with Caterpillar and Boeing (BA, up 5.4% to $185.30) gaining from expectations of cheaper imports. Retailers like Walmart (WMT, up 4.8% to $78.90) benefited from lower input costs, as tariff cuts promise cheaper goods from Asia.

Small-cap stocks, tracked by the Russell 2000, rose 4.2% to 2,300 points, reflecting domestic firms’ relief from trade war fears. Even bonds caught a lift, with 10-year Treasury yields dipping slightly to 4.1% as investors shifted to equities. The numbers paint a clear picture: the tariff pause unleashed a broad rally, with tech, industrials, and retail reaping the biggest rewards.

Expert Takes: Is the Rally Built to Last?

Not everyone’s sold on the hype. Goldman Sachs economist Sarah Miller cautions that the rally “may overstate the long-term impact of the tariff pause.” In a May 14 CNBC interview, she noted that while the 90-day pause boosts short-term confidence, underlying U.S.-China trade issues—like technology restrictions and supply chain shifts—remain unresolved. Miller predicts the S&P 500 could stabilize around 5,700 points by July if no further tariff relief follows.

Conversely, JPMorgan’s chief equity strategist, Mark Thompson, sees upside. In a Bloomberg report, he argued that the tariff cuts, paired with Fed readiness to act, create a “sweet spot” for equities. Thompson points to tech and consumer discretionary stocks as top picks, forecasting a 10% upside for the Nasdaq by year-end, potentially hitting 22,000. He advises investors to “ride the momentum but hedge with defensive assets like utilities.”

What’s Driving the Buzz?

The market’s euphoria stems from more than just tariff cuts. Trump’s April 9 comment, “This is a great time to buy,” sparked a frenzy, with X posts noting Wall Street “front-running” the trade. By May 8, his urging to “go out and buy stock now” fueled speculation of a China tariff pause, which materialized days later. The Fed’s assurance on April 12 that it’s “absolutely” ready to stabilize markets added rocket fuel, calming fears of volatility. Add in exemptions for high-demand goods like chips and smartphones, and it’s no wonder investors are piling in.

But there’s a flip side. Some analysts, like Morgan Stanley’s Lisa Chen, warn of “policy whiplash.” In a May 15 Reuters piece, Chen noted that Trump’s tariff policies have been unpredictable, and a reversal could spook markets. The 90-day pause is temporary, and without a permanent deal, the rally could fizzle. Investors need to weigh the buzz against the risks.

Your Money Now: Actionable Tips

Ready to act? Here are three fact-based moves to consider, grounded in the current market:

• Tech Stocks for Momentum: The Nasdaq’s 9.8% surge signals strength in tech. Consider ETFs like Invesco QQQ (QQQ, up 9.1% to $490.50), which tracks the Nasdaq-100. Apple and Nvidia remain strong buys, but diversify to avoid overexposure. Check SEC filings for their latest earnings—Apple’s Q2 2025 revenue hit $94.3 billion, up 5% year-over-year.
• Industrials for Stability: Caterpillar and Boeing gained from tariff relief. The Industrial Select Sector SPDR Fund (XLI, up 5.6% to $130.20) offers broad exposure. Caterpillar’s Q1 2025 revenue of $15.8 billion (flat year-over-year) suggests resilience, per its SEC 10-Q filing.
• Hedge with Bonds: If the rally falters, bonds can cushion the blow. The iShares Core U.S. Aggregate Bond ETF (AGG, up 1.2% to $100.10) is a safe bet. Yields on 10-year Treasuries at 4.1% offer steady income, per Bloomberg data.

Before jumping in, check your risk tolerance. Use tools like Morningstar or Yahoo Finance to track stock performance and analyst ratings. Consult a financial advisor to align these moves with your goals. The market’s hot, but smart money stays disciplined.

The Bigger Picture

This rally isn’t just about tariffs—it’s about confidence. The U.S. economy grew at a 2.5% annualized rate in Q1 2025, per the Bureau of Economic Analysis, and consumer spending held steady despite inflation at 3.2%. The tariff pause signals a thaw in global trade, which could lift corporate earnings. S&P 500 companies are projected to grow earnings by 8% in 2025, per FactSet, with tech and industrials leading. But geopolitics loom. If U.S.-China talks stall, or if Trump shifts policy again, markets could wobble.

For now, the data says go. The Nasdaq, Dow, and S&P 500 are riding high, and sectors like tech and industrials are cashing in. Whether you’re a seasoned investor or just starting, this is a moment to act fast—but with eyes wide open. Stay sharp with Ongoing Now 24.