Today, shares across Asia and Europe saw a notable surge, and the frantic bond sell-off appears to have stabilized following a surprise announcement from U.S. President Donald Trump. The President indicated that he would temporarily lower the hefty tariffs he had recently imposed on numerous countries.
However, the overnight rally in U.S. stocks and the dollar lost some of its momentum as tensions escalated between the U.S. and China, leaving investors baffled by the administration’s inconsistent approach to tariffs. As market participants navigate this uncertainty, it’s clear that the landscape remains volatile.
In a surprising turn of events, Trump announced a 90-day reprieve on several of his newly implemented tariffs, a move that has sparked varying reactions across global markets. This reversal followed significant market turmoil that wiped out trillions of dollars from global stock valuations and rattled U.S. Treasury bonds, as well as the dollar.
Across Europe, stock markets rebounded today in response to the President’s unexpected tariff pause. In Dublin, the ISEQ index rose by 1.9%, closing at 9,574, with notable gains from companies like AIB, Dalata Hotel Group, Glanbia, and Bank of Ireland.
Earlier, during Asian trading hours, Japan’s Nikkei share average experienced a remarkable 9% increase as investors capitalized on previously undervalued stocks following Trump’s announcement of a 90-day tariff hold.
Despite this optimism, Wall Street faced another setback today, as stocks surrendered a significant portion of the previous session’s gains. Investors are still grappling with uncertainty surrounding Trump’s economic policies and trade strategies.
All major U.S. indices spent the day in the red, disappointing traders who had expected an extension of yesterday’s momentum. The broad-based S&P 500 closed down 3.5% at 5,268, following a remarkable 9.5% surge just the day before. Meanwhile, the Dow Jones decreased by 2.5% to finish at 39,593, and the tech-heavy Nasdaq Composite Index plummeted 4.3% to end at 16,387.
Reflecting on the market dynamics, Khoon Goh, head of Asia research at ANZ, remarked, “I think the initial move was just massive short cover, and this has given the world a bit of a breathing space, except for China, because markets were starting to price in the worst-case scenario. But now that the dust has settled, I think markets will seem to sort of figure out where to go from here.”
It’s important to note that Trump’s tariff reversal is not comprehensive. A 10% blanket duty on nearly all U.S. imports will remain in place, according to the White House. Furthermore, this announcement does not affect existing duties on cars, steel, and aluminum. Additionally, Trump has increased the tariff on Chinese imports to 125%, up from the 104% level that came into effect recently.
In retaliation, China raised additional duties on American goods to 84% and imposed restrictions on 18 U.S. companies, primarily in the defense sector. Despite this escalation in Sino-U.S. trade tensions, market participants seem to be focusing on the temporary 90-day reprieve Trump has allowed for several countries.
China’s CSI300 blue-chip index rose by 1%, while Hong Kong’s Hang Seng Index climbed by 2.4%. As Wong Kok Hoong, head of equity sales trading at Maybank, stated, “I guess at least the relief is now global trade won’t grind to a complete halt.”
As the markets continue to react and adapt, the path forward remains unpredictable. Investors and analysts alike will be watching closely for developments in this ongoing saga.
Edited By Ali Musa
Axadle Times International – Monitoring.
