US stocks surged on Wednesday after Donald Trump backed down from his plans to hit trading partners with steep tariffs, but investors and analysts said uncertainty over the duties would persist.

The S&P 500 jumped 9.5 per cent on Wednesday, while the tech-heavy Nasdaq Composite jumped 12 per cent, the best days since 2008 and 2001, respectively, according to FactSet data.

Trump’s decision to pause his “reciprocal” tariffs on most countries for 90 days helped reduce some of the huge fall in equities, which had been prompted by Trump’s “liberation day” tariff announcement a week ago.

“This is Trump’s capitulation to markets. He has saved face by keeping tariffs on China,” said Andy Brenner, head of international fixed income at NatAlliance Securities.

Goldman Sachs also rapidly reversed its call that the US would enter a recession following Trump’s announcement on Wednesday.

Still, Trump on Wednesday increased tariffs on China, the world’s biggest exporter, to about 125 per cent and stuck with a series of other levies, including a 10 per cent universal duty.

Bob Michele, chief investment officer and head of global fixed income, currency and commodities at JPMorgan Asset Management, said there had not been a “huge shift” in the bond market.

“There is still so much uncertainty out there. The bond market is focused on inflation going well above the [Federal Reserve’s] target and the Fed is telling us they’re not cutting rates,” he added.

Citigroup echoed that sentiment, saying in a note to clients, “pausing reciprocal tariffs excluding China does not mean the US economy has avoided a slowdown in growth and rise in inflation”.

The Wall Street bank added: “Uncertainty over trade will persist and non-China imports may now surge, damping growth in the second quarter.”