Global shares surge as Trump pauses tariffs
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Global shares soared and a chaotic bond selloff stabilized on Thursday following U.S. President Donald Trump's announcement to temporarily reduce the heavy tariffs he had recently imposed on several countries.
However, the sharp overnight rally in U.S. stocks and the dollar lost steam as a trade war between the United States and China ratcheted up, with investors also perplexed over the flip-flopping of the Trump administration's tariff plans, News.Az reports, citing Reuters.
Following a days-long market rout that erased trillions of dollars from global stocks and jolted U.S. Treasury bonds and the dollar, Trump on Wednesday announced a 90-day pause on many of his new tariffs in a shock reversal.
That pushed European futures up sharply in the Asian session, with EUROSTOXX 50 futures and DAX futures climbing nearly 8% each, while FTSE futures gained 5.4%.
Japan's Nikkei similarly advanced more than 8%.
But Wall Street took a breather after a towering rally overnight, as investors struggled to come to terms with the U.S. administration's economic policies.
Nasdaq futures fell more than 1% and S&P 500 futures were off 0.8%.
Both indexes had clocked their biggest daily percentage gains in more than a decade during Wednesday's cash session.
The dollar fell 0.8% against the yen and 0.6% on the Swiss franc , failing to sustain its jump against the two safe haven currencies in the previous session.
Trump's reversal on the country-specific tariffs is not absolute. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place.
He also heaped pressure on China, saying he would raise the tariff on Chinese imports to 125% from the 104% level that came into effect on Wednesday.
China on Wednesday raised additional duties on American products to 84% and imposed restrictions on 18 U.S. companies, mostly in defence-related industries.
Yet investors for now seemed to view the latest escalation of Sino-U.S. trade tensions with a narrow lens, choosing merely to focus on the 90-day window Trump has granted to dozens of countries.
China's CSI300 blue-chip index was up 1%, while Hong Kong's Hang Seng Index advanced 2.4%.
Still, the onshore yuan fell to its weakest level since December 2007 at 7.3518 per dollar.
Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate , around which the yuan is allowed to trade in a 2% band, at its lowest level since September 11, 2023.
A steep selloff in bonds this week also showed some signs of easing on Thursday.
The benchmark 10-year Treasury yield dropped to 4.2908%, having touched a high of 4.5150% in the previous session and rising some 13 basis points.
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