US President Donald Trump authorised a 90-day pause as part of his tariff plan but also raised the tariff rate for China to 125%, effective immediately.

The previously announced 104% tariff on China kicked in on Wednesday.

Dow surges 2,600, S&P 500 up 8%

US stocks were soaring on a euphoric Wall Street Wednesday after President Donald Trump said he would temporarily back off on most of his global tariffs, as investors had so desperately hoped he would.

The S&P 500 was up 8% in afternoon trading and heading toward one of its best days in decades. On Tuesday, the S&P 500 careened between a gain of 4% and a loss of 3% for a second straight day of shocking reversals.

The Dow Jones Industrial Average was up 2,665 points, or 7.1%, as of 2 p.m. Eastern time, and the Nasdaq composite was 10.3% higher.

Large technology stocks still led gains, with Apple AAPL.O rising 10% and Nvidia NVDA.O up 13%.

All major sub-sectors on the S&P 500 were higher, with information technology and consumer discretionary in the lead, up 11% and 8.5% respectively.

The CBOE Volatility index .VIX - seen as Wall Street's 'fear gauge' - was last at 36.78 points.

In stock markets abroad, indexes tumbled across most of Europe and much of Asia.

London's FTSE 100 dropped 2.9%, Tokyo's Nikkei 225 sank 3.9% and the CAC 40 fell 3.3% in Paris.

Chinese stocks were an outlier, and indexes rose 0.7% in Hong Kong and 1.3% in Shanghai.

Oil prices up 3%

Oil prices climbed on Wednesday, bouncing back from four-year lows earlier in the session, after US President Donald Trump announced he would further increase tariffs on China but pause the tariff increases he announced last week for most other countries.

Brent futures were up $1.82, or 2.9%, to $64.64 a barrel at 2:02 p.m. EDT (1802 GMT). U.S. West Texas Intermediate crude futures gained $1.92, or 3.22%, at $61.50, reported Reuters.

Both contracts lost about 7% earlier in the session before the reversal.