Good morning!

After one of the most volatile mornings for Wall Street in recent memory, President Donald Trump announced a pause on much of his tariff policy yesterday. And although the business world’s response was overwhelmingly positive, labor economists say the pivot is only a temporary reprieve for an already-troubled hiring landscape.  

“It’s going to give a little bit of certainty to businesses in the short term,” Cory Stahle, an economist at Indeed’s Hiring Lab tells Fortune. But “even though this is a pause, there wasn’t necessarily a full backing down. So there still is some looming uncertainty out there.”

Trump previously announced massive levies on some of America’s largest trading partners in a sweeping policy shakeup that he dubbed “Liberation Day.” In a Wednesday social media post, however, he said those plans would be put on a 90-day hiatus, and instead put a blanket 10% tariffs on all U.S. trading partners. The exception is China, which has now been assigned tariffs of 125% up from an already-high 104%. 

To say the news was a boost to the markets is an understatement. The S&P 500 went up 9.5%, while the Dow jumped by 7.8% before trading closed for the day. Financiers like Bill Ackman, who previously warned that the tariffs would cause a “self-induced, economic nuclear winter,” were quick to celebrate the news, praising Trump and calling the policy change “brilliantly executed.” 

But not everyone was so enthusiastic. The market wil “likely go higher for a few days, but I think permanent damage has been done,” Jake Schurmeier, portfolio manager at Harbor Capital and a former member of the Federal Reserve Bank of New York’s Markets Group, told Fortune on Wednesday. 

Although the pause is certainly good news for businesses staring down the prospect of lower revenue and potential hiring pullbacks if not outright layoffs, Trump’s pivot has only delayed the dread that has already permeated corporate America. Many companies have been trapped in a holding pattern as they try to figure out how to navigate a series of major changes over the past few months, including a presidential election, and subsequent workplace-related executive orders. 

It’s true that topline unemployment numbers remain low, but they cover up some troubling truths: Many of the massive federal layoffs haven’t showed up in the data yet, and the fact that a significant portion of job seekers are taking more than six months to find a role. Hiring is also most often a long process, and savvy businesses aren’t just thinking one quarter ahead of time, says Stahl. 

“The labor market has been mostly paralyzed, mostly frozen,” he says. “It’s been a continued story of: What policies are going to happen from day to day? So I don’t think that this gives businesses a ton more certainty that they need to start going on a hiring spree.”

Azure Gilman
Azure.gilman@fortune.com

Brit Morse
brit.morse@fortune.com

This story was originally featured on Fortune.com

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• President Trump said during an event Tuesday that chipmaker TSMC pledged an additional $100 billion to build semiconductors in the U.S. after he threatened the company with tariffs of up to 100%. The company had already pledged $65 billion to make chips in the U.S. and received a $6.6 billion subsidy under the Biden administration that Trump has criticized.

Chipmaker TSMC promised to make more semiconductors in the U.S. thanks in part to Biden era incentives, but Trump says the company doubled down after he threatened it with 100% tariffs.

President Trump, during a Republican National Congressional Committee event Tuesday, criticized former President Biden’s decision to award TSMC $6.6 billion in grants as part of the 2022 CHIPS and Science Act to support semiconductor factories in Phoenix. The move was finalized just before Biden’s term ended. TSMC pledged $65 billion in funding from TSMC.

In March, TSMC, in conjunction with Trump, announced an additional $100 billion investment to make chips in the U.S. and the president emphasized that the deal was closed without offering stimulus.

“All I did is say, ‘If you don’t build your plant here, you are going to pay a big tax— 25, maybe 50, maybe 75, maybe 100%,'” Trump said during the event.

TSMC declined to comment to Fortune.

Trump has previously criticized giving government subsidies to businesses even though he sought to bring TSMC to the country during his first administration. Since returning to the White House, the president has tried to scrap the $52.7 billion CHIPS Act, to the protest of some Republican senators whose states have benefited from the funding. 

“These chip companies are loaded. They give these companies billions of dollars to build a plant in the United States. They don’t build them in the US,” Trump said Tuesday.

On Wednesday, Trump announced a 90-day pause on the steep “Liberation Day” tariffs the president instituted last week, replacing them with a 10% base tariff on all countries except for China. 

Although there was an exemption for semiconductors, the now-paused tariffs put a 32% tax on Taiwan, where most of the world’s semiconductors are produced. Still, manufactured chips that are installed in electronics abroad are still subject to the tariffs that apply to the country from which they are exported.

Trump has previously threatened other companies, including manufacturer John Deere. On the campaign trail Trump said he would hit the manufacturer with 200% tariffs unless it stopped plans to move some of its production from the Midwest to Mexico. During his first administration, Trump went after General Motors, threatening to cut its federal subsidies after the company said it would close some of its U.S. plants.

This story was originally featured on Fortune.com