Stock Market Hopes Tariff Deals Can Be Struck

The stock market is like a tightly coiled spring ready to burst into action with a strong rebound—investors are just waiting for a sign.

The brief rally came after a false report that President Donald Trump was considering a 90-day pause on reciprocal tariffs.

After the savage sell-off, the week began with wild swings. The S&P 500 rose as high as 3.4% and fell as low as 4.7% before closing down slightly—the widest intraday spread since March 2020, Callum Keown reported for Barron’s Daily.

The brief rally came after a false report that President Donald Trump was considering a 90-day pause on reciprocal tariffs.

The White House later described it as “fake news.” A deal between the U.S. and China—or negotiations of any sort—seems unlikely for now. Beijing vowed to “fight to the end” in a statement overnight after Trump threatened 50% tariffs on top of the 34% levies he announced last week.

That’s a blow for the stock market—China’s retaliation on Friday turbocharged the selloff.

However, if investors put that standoff aside, there are signs that deals can be reached elsewhere. Treasury Secretary Scott Bessent will lead negotiations with Japan after what he called a “very constructive” phone call between Trump and Prime Minister Shigeru Ishiba.

European Commission President Ursula von der Leyen said the bloc is ready to negotiate and has offered “zero-for-zero” tariffs. Trump rejected that, and the EU is preparing countermeasures.

China aside, the world seems open to negotiation—and it’s not far-fetched to think Beijing could soften its hardline stance, given the importance of U.S. consumers to its economy. The U.S. imported $438.9 billion in goods from China in 2024.