Trump Says 'This Is A Great Time To Buy,' But Portfolio Managers Give A Reality Check: 'Permanent Damage Has Been Done'

President Donald Trump indicated a more lenient approach to his trade agenda on Wednesday, leading to a significant rally in the stock market, but portfolio managers and analysts aren’t fully convinced.

What Happened: Investors had been anxious about the escalating trade war and a worrying selloff in the U.S. government bond market. However, Trump’s post on Truth Social, which announced a 90-day pause and a reduced Reciprocal Tariff of 10%, seemed to ease these fears. This marked a significant departure from his “Liberation Day” tariff-announcement ceremony on April 2, where he had promised much higher tariffs.

Despite criticizing China for its “lack of respect” towards global markets and announcing an immediate increase in tariffs on Chinese imports to 125%, Trump signaled a more conciliatory approach towards other nations. This shift, combined with coordinated statements from Treasury Secretary Scott Bessent and other administration officials, helped reassure investors who were concerned that the tariffs could spark a global trade war and recession.

Trump also indicated that some U.S. companies might be exempted from his tariffs, stating, “We’ll take a look at that.”

The President wrote, "THIS IS A GREAT TIME TO BUY!!! 

The market responded positively to this news, with the “Magnificent Seven” tech stocks, which had suffered during the tariff selloff, witnessing significant gains. Tesla stock (NASDAQ:TSLA) soared nearly 23% and led the pack while Nvidia‘s (NASDAQ:NVDA) shares rallied close to 19%. Apple Inc. (NASDAQ:AAPL) climbed over 15% while Meta Platforms (NASDAQ:META) rose nearly 15%. Amazon (NASDAQ:AMZN) surged about 12% and Microsoft (NASDAQ:MSFT) gained more than 10%. Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) climbed nearly 10%.

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Why It Matters: While the market’s immediate response was positive, experts caution that this doesn’t necessarily mean smooth sailing ahead. Christopher Smart, managing partner of Arbroath Group, warned that there is still a “bumpy road ahead with a lot of uncertainty around tariffs,” reported The Wall Street Journal.

Jake Schurmeier, portfolio manager at Harbor Capital, echoed this sentiment, stating that even though the pause is encouraging, it doesn’t resolve the lingering uncertainty. “We likely go higher for a few days, but I think permanent damage has been done,” Schurmeier told Fortune.

Meanwhile, Mark Hamrick, senior economic analyst at Bankrate, noted that investors are absorbing the “word of a cease-fire,” but the outcome will depend on the success of negotiations between the U.S. and other nations. Treasury Secretary Scott Bessent said negotiations between the administration and each country would be "bespoke," but provided few specifics on how the negotiations would unfold or what a successful resolution might entail.

• READ MORE: Bitcoin, Ethereum, XRP, Dogecoin Explode Higher As Trump Hits Pause On Reciprocal Tariffs – Benzinga

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.