US Markets React to Trump's Tariff Pause; March CPI Shows Inflation at 2.4%

US markets initially reacted positively to President Trump's announcement of a 90-day pause on reciprocal tariffs for most nations, with the exception of China, where tariffs were increased to 125% . This decision followed advice from figures like Elon Musk and Bill Ackman, who had voiced concerns about the potential economic fallout of the tariffs. The Dow Jones Industrial Average surged 2,963 points, or 7.9%, while the S&P 500 climbed 474 points, or 9.5%. However, the positive momentum was tempered by the release of the US Consumer Price Index (CPI) for March, which showed an annual inflation rate of 2.4%. This figure, while indicating a slight moderation from February's 2.8%, still reflects ongoing inflationary pressures within the economy. The energy index fell 2.4 percent in March, as a 6.3-percent decline in the index for gasoline more than offset increases in the indexes for electricity and natural gas. The food index rose 0.4 percent in March as the food at home index increased 0.5 percent and the food away from home index rose 0.4 percent over the month. The index for all items less food and energy rose 0.1 percent in March, following a 0.2-percent increase in February. Market analysts suggest that the tariff pause may provide some short-term relief, but the long-term impact remains uncertain, especially given the continued trade tensions with China and the possibility of tariffs being reinstated after the 90-day period. The EUR/USD pair is trading near 1.1050, reclaiming the 1.1000 level.