Lost in all the news about tariffs today was that Google reiterated its guide for $75 billion in capital expenditures growth this year. Semiconductor stocks have been selling off partially on the belief that a recession would lead hyperscalers to scale back their ambitious spending plans.
Yet so far, none have blinked. Microsoft (Nasdaq: MSFT) has given up some capacity, but that likely has more to do with its changing relationship with OpenAI. Other names to watch in the space would be whether Meta pulls back on its plans of spending $60 to $65 billion this year or Amazon (Nasdaq: AMZN) cuts back on expectations it will spend about $100 billion on capital expenditures.
How much did the risk of a recession go down today? Prediction market Polymarket had 66% odds of a recession before Trump’s post on Truth Social, but those odds have now dropped to 49%.
That’s still a coin flip – which is above the 22% odds before Trump began focusing on tariffs in mid-February – but it does show why stocks jumped so significantly today.
Today saw stocks down big pre-market and ended with a 12% gain in the Nasdaq, so you’d figure stocks would be very volatile in after-hours trading.
Instead, after-hours action has been pretty muted. As of 6:22 p.m. ET, Nasdaq Futures are up just .03%.
Live coverage has ended. The full story is below.
Wednesday saw the third-highest one-day gain since World War 2. Taking a look at indexes, you’d expect Wednesday’s performance to be a good market year rather than day!
Let’s dive into the details on why today was so historic and what it means for the market moving forward.
At 1:18 p.m. Donald Trump posted a message on Truth Social that started a historic rally:
The post, which you can see above, said that Trump was issuing a 90-day pause on reciprocal tariffs for all countries aside from China. After the post, markets immediately zoomed skyward to a level close to where they were before Trump announced reciprocal tariffs on April 2nd.
Does this mean that a trade war is averted? Not quite. While markets bounced back after days of furious selling, the Nasdaq is still off 15% from prices before Trump’s earlier tariffs went into effect. In addition, this is still a 90-day pause when Trump wants to negotiate individually with countries. There’s a chance in these negotiations that Trump could decide to go back to more punitive tariffs.
However, for now, the risk of a deep recession has been lessened, which was enough to send stocks back to where they were trading last week.
What stocks saw the biggest gains today? In short, ‘risk off’ stocks that saw the steepest selling generally saw the biggest gains.
Contact [email protected] for any questions or corrections.
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
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