Why stocks are jumping after 3 days of brutal losses
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- US stocks surged Tuesday morning as traders took in the latest tariff news.
- Japan is in talks with the US to work out a trade deal, President Donald Trump said.
- Traders were looking to claw back some of their worst losses since the start of the pandemic.
US stocks jumped on Tuesday after a brutal three-day wipeout as traders were encouraged by comments from the president indicating Japan was negotiating with the US over tariffs.
Investors are starved for any good news that could help turn around the stock market's worst streak since 2020. After a wild day of trading on Monday, which included a sudden rally prompted by fake news of a prospective 90-day tariff delay, the market ended mostly lower again.
On Tuesday, major indexes were up sharply in the morning, with the Dow Jones Industrial Average jumping more than 1,300 points. The S&P 500 and Nasdaq composite were also in the green, with each soaring more than 3.5%.
What's behind Tuesday's rally?
News that Japan, which asked President Donald Trump on Monday to rethink his policies, could be working toward a trade deal is fueling some optimism that the trade war could be dialed back.
US Treasury Secretary Scott Bessent told CNBC on Tuesday that 70 countries included in the US's latest tariff package had reached out for talks.
Investors took the reprieve from the volatility to pile back into megacap tech names. Here were some of the biggest movers early Tuesday:
The prospect of Japan progressing toward a trade deal is also overshadowing tensions between the US and China, which have escalated since the US raised its tariff rate on Chinese goods to 54% last week.
China, which slapped the US with reciprocal tariffs last week, said it would "fight to end" after Trump threatened Monday to impose another 50% tariff on US imports from the nation.
Market sentiment remains shaky after the latest decline, which marked the worst sell-off since 2020. The CBOE Volatility Index, also known as Wall Street's fear gauge, declined 14% over the past day but remains well above levels from before Trump unveiled his Liberation Day tariff package.
"We expect intraday volatility to continue, as this market tries to read the tea leaves on what the Trump administration and its top economic officials are saying," Clark Bellin, the president and chief investment officer of Bellwether Wealth, wrote in a note.
Correction: April 8, 2025 — An earlier version of this story misstated which day the stock market rallied. It was Tuesday, not Monday.