United States stock markets closed higher on April 23, 2025, though earlier gains lessened as investors considered mixed signals regarding trade policy.

The S&P 500 rose 1.7% after peaking at 3.2%, while the Nasdaq increased by 2.5%, down from a 4.1% earlier gain.

The Dow Jones Industrial Average added 400 points, or 1.1%, after an earlier surge of nearly 3%.

Markets opened positively following President Donald Trump’s comments about a potential easing of tariffs on Chinese imports.

However, White House officials later confirmed that tariffs would remain in place for the time being.

🔗 Source: NBC News

🧠 Food for thought

1️⃣ Historical echoes in today’s tariff battle

The current U.S. tariff policies reflect historical cycles that have often proven economically counterproductive.

The Smoot-Hawley Tariff Act of 1930 raised tariffs by an average of 20%, triggering retaliatory measures from Europe that reduced transatlantic trade by two-thirds 1.

A similar pattern of retaliation is unfolding today, with China having implemented countermeasures and halted agricultural purchases in response to previous U.S. tariffs 2.

Goldman Sachs has estimated that the total peak effect of the modern trade war could amount to a 0.2% decline in U.S. GDP 3.

The post-World War II period demonstrated a different approach, as the U.S. led global efforts to reduce tariffs through establishing GATT and later the WTO, which resulted in higher income levels and increased consumer choice 4.

2️⃣ Market volatility reflects policy uncertainty costs

The S&P 500’s behavior, rising 3.2% before settling at just 1.7% higher, illustrates how markets price in the economic costs of policy uncertainty.

Research has identified 28 specific event days between January 2018 and August 2019 where trade war news significantly impacted U.S. financial markets, affecting everything from high-yield spreads to stock prices 3.