The Latest: Stocks surge after Trump announces 90-day pause on tariffs but raises taxes on China

Facing a global market meltdown, President Donald Trump on Wednesday abruptly backed down on his tariffs on most nations for 90 days but raised his tax rate on Chinese imports to 125%.

U.S. markets surged in response.

The S&P 500 was up 7.8% in afternoon trading. It had been down earlier in the morning amid worries about Trump’s trade war and whether it would cause a recession, as economists fear. But it spiked immediately after Trump sent the social media posting that investors have been waiting for. The Dow Jones Industrial Average was up 2,476 points, or 6.6%, as of 1:35 p.m. Eastern time, and the Nasdaq composite was 9% higher.

Investors have been desperate for Trump to ease up on his tariffs, which economists say could cause a global recession and increase inflation.