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European markets are on track to rise sharply when trading begins Thursday after U.S. President Donald Trump reversed course on tariffs after the European market close, sending global markets higher.
In a volatile week for markets that has been marked by sharp moves higher and lower, the pan-European Stoxx 600 ended the prior session down 3.5% at its lowest closing level since January 2024.
But later on Wednesday, Trump temporarily reduced new tariff rates on imports from most U.S. trade partners to 10% for 90 days — a sharp reversal from previous comments in which he insisted duties would not be lifted.
U.S. stocks rallied after Trump's announcement, with the S&P 500 soaring more than 9% during Wednesday's session to see its third-largest gain in a single day since World War II.
The Dow Jones Industrial Average jumped 7.87% — its biggest percentage advance since March 2020 — and the Nasdaq Composite jumped over 12%, notching its largest one-day jump since January 2001 and second-best day ever.
Deutsche Bank Research's George Saravelos said some version of the so-called "Trump put" — a play on options terminology that suggests the president would keep the stock market from falling too far — is back.
"The administration is finally signalling responsiveness to the very extreme market conditions we highlighted in the morning," he said in a note Wednesday.
"At the margin, this should reduce the probability that such an extreme policy mix returns. It is more likely that the administration accepts negotiated outcomes on trade (and other) policies, and it is more likely the administration becomes responsive to market pressure, if this continues."
Trump's shift in policy came on the same day his so-called reciprocal tariffs came into effect, with close to 90 countries being targeted.
China, however, did not get a reprieve from the president. He increased tariffs on the country to 125% after China said earlier in the day that it would increase duties on imports from the U.S. to 84%.
The European Union also retaliated Wednesday, with the bloc's lawmakers approving its first set of countermeasures in response to the steel and aluminum tariffs imposed by the U.S. in March.
Asia-Pacific shares were last widely higher in Thursday trading, with Japanese markets leading gains in the region.
— CNBC's Dan Mangan and Sean Colon contributed to this report.
Trump unlikely to revamp extreme tariff policies, but ‘the damage has been done’: Deutsche Bank
U.S. President Donald Trump speaks during an event with the racing champions from NASCAR Cup Series, NTT IndyCar Series, and IMSA WeatherTech SportsCar Championship, at the White House in Washington, D.C., U.S., April 9, 2025.
Nathan Howard | Reuters
In a note to clients on Wednesday evening, Deutsche Bank Research's George Saravelos noted that U.S. President Donald Trump had mentioned the bond market during his press conference at the White House that day.
"The administration is finally signalling responsiveness to the very extreme market conditions we highlighted in the morning. At the margin, this should reduce the probability that such an extreme policy mix returns," Saravelos said.
Stocks on Wall Street surged on Wednesday after Trump announced a 90-day pause on country-specific tariffs, with the exception of new duties on China.
Despite the market response, Saravelos warned that "the damage has been done" by Trump's reciprocal tariffs policy.
"Even if the tariffs are permanently suspended, damage has been done to the economy via a permanent sense of unpredictability in policy," Saravelos explained. "The events of the last few weeks will resonate amongst global economic partners during the upcoming negotiations on trade and indeed for many years to come. The desire to build greater strategic independence from the US across all fronts will be here to stay."
— Chloe Taylor
European stocks head for jump at the open
European stocks look set to rise sharply when trading begins Thursday.
According to IG data, the U.K.'s FTSE 100 was set to add 414 points to 8,071, the German DAX was on track to jump 1,547 points to 21,231, and France's CAC 40 was set to rise 543 points to 7,418. The Italian FTSE MIB meanwhile was set to soar 3,031 points to 34,911.
— Sophie Kiderlin
Japan's Nikkei surges over 8% in early trade as Trump tariff pause fuels stock rally in Asia
Japan's Nikkei 225 share average rallied significantly on Thursday, leading gains in Asia-Pacific.
The benchmark surged 8.83% as at 9.25 a.m. local time to 34,508.62, crossing the 34,000 threshold after six days.
Nikkei 225
Cramer says stay invested even when there is despair
CNBC Investing Club with Jim Cramer
Rob Kim | NBCUniversal
Jim Cramer said the market's dramatic turnaround is exactly why investors need to stay in the market even when uncertainty and volatility are high. "If you want to help people make money, tell them to stay in the game when there's total despair," said Cramer, who had urged investors to "stay the course" throughout the four-day market skid.
— Kevin Stankiewicz
Stock market's historic rally by the numbers
For the 30-stock Dow Jones Industrial Average, it surged nearly 3,000 points, or 7.87%, scoring its biggest advance since March 2020. The 12.16% surge for the tech-heavy Nasdaq Composite marked its second-best day ever.
— Yun Li
Market reaction was 'absolutely not' a factor in tariff pause, Lutnick says
Commerce Secretary Howard Lutnick said on "Fast Money" that the selling in financial markets over the past week was "absolutely not" a factor in the tariff pause on Wednesday. Earlier in the day, before President Trump announced the change, the S&P 500 had fallen to just above its bear market threshold, while the 10-year Treasury yield briefly traded above 4.5%.
CNBC's Melissa Lee also asked Lutnick if U.S. companies could be confident in the direction of policy going forward. The Commerce chief responded that firms should carefully consider their exposure abroad and predicted upcoming announcements of companies building products in the U.S.
"I think it's important for companies to understand that the countries they do their business in matter. If you do business in China, or you do business with a country that basically is just a proxy China, then you're going to have to deal with the fact that President Trump does not think we are being treated correctly," Lutnick said.
— Jesse Pound
English (US)