Wall Street roared higher on Wednesday in a dramatic reversal of sentiment, as investors cheered a surprise announcement from President Donald Trump: a 90-day pause on tariffs for countries that have not retaliated against U.S. trade measures.

The news ignited a broad risk-on rally, catapulting major indices to multi-month highs and sending volatility plunging.

Trump's latest Truth Social post slammed China for showing "a lack of respect" and declared an immediate 125% tariff hike on Chinese goods.

"At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable," he said.

He praised the over 75 countries that, in his words, "have not, at my strong suggestion, retaliated in any way, shape, or form."

As a reward, those countries would benefit from a temporary 10% reciprocal tariff and a 90-day pause on additional duties.

During a White House press conference, Treasury Secretary Scott Bessent sought to translate the president's fiery rhetoric into market policy terms.

He described the tariff realignment as a necessary correction to "decades of imbalances in global trade."

"The market didn't understand Trump's maximum level tariffs," he said.

Bessent delivered a series of sharp jabs at Beijing. "They sell us five times what we sell them," he said. "It's an own goal by China." He also accused Beijing of exposing itself to the world as "the bad actor," and argued that Trump's move creates the leverage to correct the deficit.

"They've showed themselves to the rest of the world that they are the bad actor," Bessent stated

Regarding the new level of universal tariffs, Bessent said that "10% is a temporary floor," which gives "more certainty now"

Equity markets skyrocketed. The Nasdaq 100 - as tracked by the Invesco QQQ Trust (QQQ  ) - exploded 10% higher, its strongest session since October 2020.

The S&P 500 jumped 7.6% to above 5,350, while the Dow Jones Industrial Average soared 6.8%, topping 40,000. Small caps joined the party too, with the Russell 2000 climbing 9.1%.

Volatility collapsed, as the CBOE VIX Index plunged more than 27%, reflecting the market's sudden embrace of risk.

Every sector in the S&P 500 traded deep in the green, led by technology and consumer discretionary.

Within the tech sector, the Magnificent Seven saw explosive gains across the board as investors piled back into mega-cap growth theme:

All S&P 500 stocks rallied, with the top performers being United Airline Holdings Inc. (UAL  ), Microchip Technology Company (MCHP  ) and SanDisk Corp. (SNDK  ), up 22%, 21% and 20%, respectively.