U.S. President Donald Trump’s stunning decision to pause the hefty duties he had just imposed on dozens of countries sent battered global stock markets surging on Thursday even as he ratcheted up a trade war with the world’s No. 2 economy China.

Trump’s turnabout on Wednesday, which came less than 24 hours after steep new tariffs kicked in on most trading partners, followed the most intense episode of financial market volatility since the early days of the COVID-19 pandemic, Reuters reported.

The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in U.S. government bond yields that appeared to catch Trump’s attention.

“I thought that people were jumping a little bit out of line, they were getting yippy, you know,” Trump told reporters after the announcement, referring to jitters sportpeople sometimes get.

U.S. stock indexes shot higher on the news, with the benchmark S&P 500 index closing 9.5% higher. Bond yields came off earlier highs and the dollar rebounded against safe-haven currencies.

The relief spread through Asian markets as they opened on Thursday with Japan’s Nikkei index surging 8% while European futures also pointed to a sharp rebound. Even Chinese stocks rose, propped up by hopes of state support, although its yuan currency fell to the lowest level since the global financial crisis.

Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives.

U.S. Treasury Secretary Scott Bessent asserted that the pullback had been the plan all along to bring countries to the bargaining table. Trump, though, later indicated that the near-panic in markets that had unfolded since his April 2 announcements had factored in to his thinking.

Despite insisting for days that his policies would never change, he told reporters on Wednesday: “You have to be flexible.”

But he kept the pressure on China, the second biggest provider of U.S. imports. Trump said he would raise the tariff on Chinese imports to 125% immediately from the 104% level that took effect at midnight.

Beijing on Wednesday slapped 84% tariffs on U.S. imports to match Trump’s earlier tariff salvo and has vowed to “fight to the end” in an escalating tit-for-tat trade dispute between the world’s top two economies.

Chinese companies that sell products on Amazon are preparing to hike prices for the U.S. or quit that market due to the “unprecedented blow” from the tariff hikes, the head of China’s largest e-commerce association said.

‘GOADED CHINA’

Trump’s reversal on the tariffs imposed on other countries is also not absolute. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminum that are already in place.

The 90-day freeze also does not apply to duties paid by Canada and Mexico, because their goods are still subject to 25% fentanyl-related tariffs if they do not comply with the U.S.-Mexico-Canada trade agreement’s rules of origin. Those duties remain in place for the moment, with an indefinite exemption for USMCA-compliant goods.

Trump’s tariffs had sparked a days-long selloff that erased trillions of dollars from global stocks and pressured U.S. Treasury bonds and the dollar, which form the backbone of the global financial system. Canada and Japan said they would step in to provide stability if needed – a task usually performed by the United States during times of economic crisis.

Analysts said the sudden spike in share prices might not undo all of the damage. Surveys have found slowing business investment and household spending due to worries about the impact of the tariffs, and a Reuters/Ipsos survey found that three out of four Americans expect prices to increase in the months ahead.

Goldman Sachs cut its probability of a recession back to 45% after Trump’s move, down from 65%, saying the tariffs left in place were still likely to result in a 15% increase in the overall tariff rate.

Treasury Secretary Bessent shrugged off questions about market turmoil and said the abrupt reversal rewarded countries that had heeded Trump’s advice to refrain from retaliation. He suggested Trump had used the tariffs to create maximum negotiating leverage. “This was his strategy all along,” Bessent told reporters. “And you might even say that he goaded China into a bad position.”

Bessent is the point person in the country-by-country negotiations that could address foreign aid and military cooperation as well as economic matters. Trump has spoken with leaders of Japan and South Korea, and a delegation from Vietnam met with U.S. officials on Wednesday to discuss trade matters, the White House said.

Bessent declined to say how long negotiations with the more than 75 countries that have reached out might take.

Trump said a resolution with China was possible as well. But officials have said they will prioritize talks with other countries.

“China wants to make a deal,” Trump said. “They just don’t know how quite to go about it.”

Trump told reporters that he had been considering a pause for several days. On Monday, the White House denounced a report that the administration was considering such a move, calling it “fake news.”

Earlier on Wednesday, before the announcement, Trump tried to reassure investors, posting on his Truth Social account, “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”

Later, he added: “THIS IS A GREAT TIME TO BUY!!!”

President Donald Trump made a surprise announcement on Monday that the United States and Iran were poised to begin direct talks on Tehran’s nuclear program, but Iran’s foreign minister said the discussions in Oman would be indirect, Reuters reported.

In a further sign of the difficult path to any deal between the two geopolitical foes, Trump issued a stark warning that if the talks are unsuccessful, “Iran is going to be in great danger.”

Iran had pushed back against Trump’s demands in recent weeks that it directly negotiate over its nuclear program or be bombed, and it appeared to be sticking to that position on Monday.

“We’re having direct talks with Iran, and they’ve started. It’ll go on Saturday. We have a very big meeting, and we’ll see what can happen,” Trump told reporters in the Oval Office during a meeting with visiting Israeli Prime Minister Benjamin Netanyahu.

“And I think everybody agrees that doing a deal would be preferable,” Trump said. He added that Saturday’s talks with Iran would be at a very high level, without elaborating. He declined to say where the talks would take place but held out the possibility that a deal could be reached.

Iran’s Foreign Minister Abbas Araqchi posted on X that indirect high-level talks would be held in Oman, adding: “It is as much an opportunity as it is a test. The ball is in America’s court.”

The U.S. and Iran held indirect talks during former President Joe Biden’s term but they made little if any progress. The last known direct negotiations between the two governments were under then-President Barack Obama, who spearheaded the 2015 international nuclear deal that Trump later abandoned.

Warnings by Trump of military action against Iran had jangled already tense nerves across the Middle East after open warfare in Gaza and Lebanon, military strikes on Yemen, a change of leadership in Syria and Israeli-Iranian exchanges of fire.

Trump, who has beefed up the U.S. military presence in the region since taking office in January, has said he would prefer a deal over Iran’s nuclear program to armed confrontation and on March 7 said he had written to Supreme Leader Ayatollah Ali Khamenei to suggest talks, read the report.

Iranian officials said at the time that Tehran would not be bullied into negotiations.

“Iran cannot have a nuclear weapon and if the talks aren’t successful I actually think it will be a very bad day for Iran,” Trump said in the Oval Office on Monday.

Direct talks would not occur without the explicit approval of Khamenei, who in February said negotiations with the U.S. were “not smart, wise, or honorable.”

Hours before Trump’s announcement, Iranian Foreign Ministry spokesperson Esmail Baghaei said Iran was awaiting a U.S. response to Tehran’s proposal for indirect negotiations. He said the Islamic Republic believed it was making a generous, responsible and honorable offer.

After Trump spoke, a senior Iranian official, speaking on condition of anonymity, told Reuters: “The talks will not be direct … It will be with Oman’s mediation.” Oman, which maintains good relations with both the U.S. and Iran, has been a longtime channel for messages between the rival states.

Iran’s Nournews, affiliated with the country’s top security body, described Trump’s statement about a planned direct meeting as part of a “psychological operation aimed at influencing domestic and international public opinion.”

A second Iranian official, speaking on condition of anonymity, said over the weekend there was possibly a window of around two months to reach a deal, citing worries that Iran’s longtime foe Israel might launch its own attack if talks took longer.

Netanyahu, who has shown little support for U.S. negotiations with Iran, said if diplomacy could prevent Tehran from ever getting nuclear weapons “in a full way, the way it was done in Libya, I think that would be a good thing.”

During his 2017-2021 term, Trump withdrew the U.S. from the 2015 deal between Iran and world powers designed to curb Iran’s sensitive nuclear work in exchange for sanctions relief. Trump also reimposed sweeping U.S. sanctions, Reuters reported.

Since then, Iran has far surpassed that deal’s limits on uranium enrichment.

Western powers accuse Iran of having a clandestine agenda to develop nuclear weapons capability by enriching uranium to a high level of fissile purity, above what they say is justifiable for a civilian atomic energy program.

Tehran says its nuclear program is wholly for civilian energy purposes.

The White House National Security Council did not immediately respond to a request for details.

The shift comes at a precarious time for Tehran’s regional “Axis of Resistance” which it has established at great cost over decades to oppose Israel and U.S. influence. The axis has been severely weakened since the Palestinian group Hamas’ attack on Israel on October 7, 2023, tipped the Middle East into conflict.

Hamas in Gaza and Hezbollah in Lebanon have been hammered by Israel since the Gaza war began while the Houthi movement in Yemen has been targeted by U.S. airstrikes since last month. Israel severely damaged Iran’s air defenses last year.

The fall of Syrian President Bashar al-Assad, another key Iranian ally, has further weakened the Islamic Republic’s influence.

Thousands of protesters gathered in Washington, D.C., and across the U.S. on Saturday, part of some 1,200 demonstrations that were expected to form the largest single day of protest against President Donald Trump and his billionaire ally Elon Musk since they launched a rapid-fire effort to overhaul government and expand presidential authority.

People streamed onto the expanse of grass surrounding the Washington Monument under gloomy skies and light rain. Organizers told Reuters that more than 20,000 people were expected to attend a rally at the National Mall.

Some 150 activist groups had signed up to participate, according to the event’s website. Protests were planned in all 50 states plus Canada and Mexico.

Terry Klein, a retired biomedical scientist from Princeton, New Jersey, was among those who gathered by the stage beneath the Washington Monument.

She said she drove down to attend the rally to protest Trump’s policies on “everything from immigration to the DOGE stuff to the tariffs this week, to education. I mean, our whole country is under attack, all of our institutions, all the things that make America what it is.”

The crowd around the memorial continued to build throughout the day. Some carried Ukrainian flags and others wore Palestinian keffiyeh scarves and carried “Free Palestine” signs, while Democrats from the U.S. House of Representatives blasted Trump’s policies on stage.

Wayne Hoffman, 73, a retired money manager from West Cape May, New Jersey, said he was concerned about Trump’s economic policies, including his widespread use of tariffs.

“It’s going to cost the farmers in the red states. It’s going to cost people their jobs – certainly their 401Ks. People have lost tens of thousands of dollars,” Hoffman said.

Kyle, a 20-year-old intern from Ohio, was a lone Trump supporter, sporting a “Make America Great Again” hat and walking the fringe of the Washington, D.C., rally while engaging protesters in debate.

“Most people aren’t too hostile. A few people cuss,” said Kyle, who declined to give his last name.

Trump, who shook financial markets and upset nations around the world with a raft of trade tariffs this week, spent the day in Florida, playing a round of golf at his club in Jupiter before returning to his Mar-a-Lago compound in the afternoon.

Some four miles (6 km) from Mar-a-Lago in West Palm Beach, more than 400 demonstrators gathered on a sunny day in protest. Drivers honked their horns in support of the pastel-and khaki-clad demonstrators as they passed by.

“Markets tank, Trump golfs,” read one sign.

At another protest in Stamford, Connecticut, Sue-ann Friedman, 84, brought a bright pink, handmade sign objecting to the administration’s moves to cut funding for medical research.

“I thought my marching days were over, and then we get somebody like Musk and Trump,” said Friedman.

Paul Kretschmann, a 74-year-old retired attorney in Stamford, said it was the first time he had ever attended a protest.

“My concern is that Social Security is going to be gutted, that we’re going to lose our benefits, and that there’s going to be nobody around to administer it in the first place,” he said. “I’m afraid that this is all part of a larger plan to dismantle the government and for Trump to maintain power.”

With Trump’s blessing, Musk’s Department of Government Efficiency team has scythed through the U.S. government, eliminating more than 200,000 jobs from the 2.3 million federal workforce. At times, the effort has been haphazard and forced the recall of needed specialists.

On Friday, the Internal Revenue Service began laying off more than 20,000 workers, as much as 25% of its ranks.

Several hundred people gathered outside the headquarters of the Social Security Administration, a top DOGE target, near Baltimore to protest against cuts to the agency which delivers benefits to the elderly and disabled.

Linda Falcao, who turns 65 in two months, told the crowd she had been paying into the Social Security fund since the age of 16.

“I’m terrified, I’m angry, I’m pissed, I’m bewildered this could happen to the United States,” she said. “I do love America and I’m heartbroken. I need my money. I want my money. I want my benefits!” The crowd chanted, “It’s our money!”

White House assistant press secretary Liz Huston disputed the protesters’ charge that Trump aimed to cut Social Security and Medicaid.

“President Trump’s position is clear: he will always protect Social Security, Medicare, and Medicaid for eligible beneficiaries. Meanwhile, the Democrats’ stance is giving Social Security, Medicaid, and Medicare benefits to illegal aliens, which will bankrupt these programs and crush American seniors,” Huston said in an email.

Much of Trump’s agenda has been restrained by lawsuits contending he has overstepped his authority with attempts to fire civil servants, deport immigrants and reverse transgender rights.

Trump returned to office on January 20 with a stream of executive orders and other measures critics say are aligned with an agenda outlined by Project 2025, a deeply conservative political initiative to reshape government and consolidate presidential authority. His supporters have applauded Trump’s audacity as necessary to disrupt entrenched liberal interests.

Hours before the protests were due to kick off in the United States, hundreds of anti-Trump Americans living in Europe gathered in Berlin, Frankfurt, Paris and London to voice opposition to Trump’s sweeping makeover of U.S. foreign and domestic policies.