07:37 AM EDT, 04/10/2025 (MT Newswires) -- United States President Donald Trump announced a 90-day pause on reciprocal tariffs on Wednesday, sending equities rallying sharply, noted Bank of Montreal (BMO).

U.S. tariffs on China will remain and rise to 125% in retaliation to their retaliation, but stiff reciprocal tariffs of as high as 50% on a wide range of trading partners will be scaled down to the baseline 10% rate.

The bank said that, not accounting for sectoral carve-outs, the original trade-weighted average reciprocal rate of 25.3% still rises to 30.9% with China at 125%. The S&P 500 surged 9.5% on the day, the third largest one-day advance going back to the 1950s --topped only by two massive rallies during the financial crisis in 2008.

Futures, however, point to another lower open on Thursday, stated BMO. Looking through the noise, the S&P 500 is now down just over 7% on the year, the TSX is off roughly 4%. Some areas of the market -- U.S. tech and consumer discretionary -- are still down more than 15%, while consumer staples, health care and Canadian materials, such as gold, are positive on the year. U.S. Treasury yields were modestly lower on the day and the 10-year starts early Thursday at 4.29%, after pushing toward 4.5% early Wednesday.

The Canadian dollar (CAD or loonie) also rallied with move back into risk and starts Thursday at $1.407/USD (71.1 US cents), added the bank.

Canada's building permits for February mark the lone major release at 8:30 a.m. on Thursday. BMO is looking for a 1.5% drop in the month.