Trump's Tariff Suspension Revives U.S. Stock Market—Bitcoin Surges Back Above $100,000

Market Reacts to Trump's Trade Policy Adjustments

The U.S. stock market faced extreme volatility following President Donald Trump's tariff policies on major trade partners, but a last-minute suspension of tariffs on Mexico and Canada helped stocks recover some of their losses. Meanwhile, Bitcoin surged past the crucial $100,000 mark, regaining ground lost amid market uncertainty.

On February 3 (local time), the Standard & Poor’s 500 Index (S&P 500) closed at 5,994.57, down 45.96 points (-0.76%). The tech-heavy Nasdaq Composite dropped 235.49 points (-1.20%) to close at 19,391.96, while the Dow Jones Industrial Average fell 122.75 points (-0.28%) to end at 44,421.91. The markets initially plummeted in response to Trump's decision to impose 25% tariffs on Canadian and Mexican imports and 10% tariffs on Chinese goods. The announcement sparked fears of an intensified trade war, higher consumer prices, and potential disruptions to Federal Reserve policy, leading to a sharp sell-off in equities.

Earlier, the market reacted negatively to Trump’s signing of an executive order enforcing tariffs on major trade partners. The move was seen as a significant escalation in global trade tensions, potentially triggering inflationary pressures and supply chain disruptions. Investors worried that the tariffs could force the Fed into a difficult position—raising interest rates to combat inflation while simultaneously trying to manage economic growth.

The uncertainty hit the Nasdaq particularly hard, with the index losing as much as 2.5% at one point. The Dow Jones Industrial Average also dipped nearly 1.5%, reflecting broader market concerns. However, news later in the day that the U.S. government would delay tariffs on Mexico for one month helped the Dow recover, even briefly turning positive. The subsequent announcement that tariffs on Canada would also be postponed further stabilized the market.

Cryptocurrencies, which had mirrored traditional financial markets in their downturn, saw a quick rebound. Bitcoin, which had dipped below the $100,000 level, climbed 4.88% in 24 hours to reach $102,144 as of February 4 (KST), according to CoinMarketCap. Investors interpreted the tariff suspension as a sign of potential economic stability, fueling optimism in digital assets.

Despite this short-term relief, many analysts remain cautious about the long-term effects of Trump's tariff policies. Some experts warn that while the market reacted positively to the tariff suspension, ongoing trade tensions and policy unpredictability could continue to drive volatility. High-profile stocks such as Tesla (-5.2%) and Apple (-3.4%) still faced significant declines, reflecting underlying investor concerns.

Carol Schleif, Chief Investment Officer at BMO Family Office, emphasized the market’s sensitivity to tariff-related decisions. “Trump has consistently used tariffs as a strategic tool to achieve broader economic and political objectives. While the delay is welcome news, tariffs are not going away anytime soon, and short-term volatility is likely to persist,” she explained.

Meanwhile, crude oil markets also experienced turbulence in response to the tariff announcements. The price of West Texas Intermediate (WTI) crude oil for March delivery rose to $72.53 per barrel, up $0.63 (+0.87%) from the previous day. Prices briefly touched $75 per barrel but retreated after news of the Mexico tariff delay.

The coming weeks will be crucial in determining the full impact of Trump's tariff maneuvers on global markets. Investors will closely watch for further policy shifts, trade negotiations, and Federal Reserve responses to gauge the long-term outlook for equities, cryptocurrencies, and commodities.