THE ART OF THE DEAL: Trump’s Trade Strategy Triggers Wall Street Rebound

Wall Street roared back to life on Wednesday after a blockbuster 10-year Treasury auction helped restore investor confidence, crushing predictions that foreign capital would flee in protest of President Donald Trump’s aggressive trade policy. Adding fuel to the rally, Trump announced a temporary halt to tariff hikes for countries not retaliating against the U.S.

Markets exploded higher: the Dow surged 5.9%, the S&P 500 jumped 7.3%, and the Nasdaq skyrocketed 8.9%, snapping back from a brutal stretch of losses driven by spiking bond yields and deepening global trade tensions.

What ignited the rally? A stunningly successful $39 billion sale of 10-year Treasury notes. The auction cleared at a yield of 4.435%—below forecasts—with a hefty “stop-through,” a signal of red-hot demand. Most notably, foreign buyers, categorized as “indirect bidders,” claimed a staggering 88% of their allocation—far surpassing normal levels.

Analysts were quick to label the auction as “exceptionally strong.”

Simultaneously, Trump took to social media to reveal a 90-day delay on further tariff increases for nations that haven’t retaliated against last week’s measures. A 10% base tariff remains in place, but the pause was seen as a strategic move to stabilize tensions and keep negotiations open.

Fears had been swirling for days that Trump’s trade tactics would drive a mass exodus from U.S. assets, particularly from China and Japan, who together hold trillions in American debt. Yields on the 10-year note had shot up over 60 basis points in just four days—marking the steepest climb since the 2008 crash. Talk of a liquidity crunch and emergency Fed measures filled the air.

But Treasury Secretary Scott Bessent worked to calm markets.

“There are highly leveraged players experiencing losees,” he said on Fox Business. “They are having to deleverage… I believe there is nothing systemic about this.”

Wednesday’s bond sale backed up his view. The overwhelming demand signaled strong confidence in U.S. debt, even in the face of rising rates and geopolitical uncertainty. Treasurys rallied, yields fell, and stock markets took off in response.

Just one day earlier, a weak 3-year auction had intensified fears of a buyer strike driven by tariffs and fiscal concerns. Some even warned the Fed might need to step in to stabilize funding markets.

Instead, the opposite happened. Investors doubled down—sending a clear message that U.S. capital markets remain the global gold standard, no matter the political noise.