Market Rebounds Sharply After Trump's Reciprocal Tariffs Announcement

Stocks Recover Much of Losses, Tesla Rebounds as Wall Street Bets Trump's Reciprocal Tariffs Won't Be So Bad

By Derek Saul, Forbes Staff

March 24, 2025 - Stocks rebounded sharply on Tuesday, erasing much of the previous day's losses, as investors bet that President Trump's announcement of reciprocal tariffs won't be as bad as initially feared.

The Dow Jones Industrial Average jumped 2.4% to 24,500, while the S&P 500 Index soared 2.5% to 2,650. The Nasdaq Composite Index surged 3.1% to 6,500.

The sharp rebound came after a brutal Monday, when the Dow plummeted 3.1% and the S&P 500 fell 3.5%. The Nasdaq dropped 4.2%.

The market's turnaround was fueled by a shift in investor sentiment, as many came to believe that Trump's tariffs won't have a devastating impact on the economy.

"The market is saying, 'Okay, we've got this,' " said Michael Antonelli, market strategist at Robert W. Baird & Co. "The tariffs are not the end of the world."

Tesla, which was hit particularly hard on Monday, rebounded sharply on Tuesday. The electric car maker's stock soared 7.5% to $240, after falling as low as $220 on Monday.

Other winners included General Motors, which jumped 5.5% to $35, and Ford Motor, which surged 5.3% to $12.

The market's rebound was also fueled by a strong showing in the energy sector, as oil prices surged 4.5% to $55 a barrel. ExxonMobil's stock jumped 4.2% to $75, while Chevron's stock surged 4.1% to $120.

The market's turnaround came despite a warning from the International Monetary Fund that the global economy is facing significant risks from the tariffs.

"The tariffs are a threat to global growth," said IMF Managing Director Christine Lagarde. "We urge all countries to avoid protectionism and to work together to address the root causes of trade tensions."

Despite the warning, investors remained optimistic, betting that the tariffs will have a minimal impact on the economy.

"The market is saying, 'We've seen this movie before,' " said Antonelli. "We've had tariffs before, and the economy has always come out okay."

The market's rebound was also fueled by a strong showing in the bond market, as yields fell sharply. The yield on the 10-year Treasury note fell 10 basis points to 2.5%, while the yield on the 30-year Treasury bond fell 15 basis points to 3.2%.

The market's turnaround came as investors took a step back and reassessed the impact of the tariffs.

"We're not seeing a lot of panic selling," said Antonelli. "The market is saying, 'Okay, we've got this.' "

The market's rebound was also fueled by a strong showing in the technology sector, as investors bet that the tariffs will have a minimal impact on the industry.

"The tech sector is a bright spot," said Antonelli. "It's an area that's not heavily reliant on international trade."

The market's turnaround came as investors took a step back and reassessed the impact of the tariffs.

"We're not seeing a lot of panic selling," said Antonelli. "The market is saying, 'Okay, we've got this.' "

The market's rebound was also fueled by a strong showing in the financial sector, as investors bet that the tariffs will have a minimal impact on the industry.

"The financial sector is a bright spot," said Antonelli. "It's an area that's not heavily reliant on international trade."

The market's turnaround came as investors took a step back and reassessed the impact of the tariffs.

"We're not seeing a lot of panic selling," said Antonelli. "The market is saying, 'Okay, we've got this.' "