Global financial markets are currently experiencing significant fluctuations, leaving many investors feeling uneasy. While Wall Street futures took a downturn on Thursday, stock exchanges across Asia and Europe rallied, buoyed by a surprising announcement from US President Donald Trump regarding tariffs.

However, this momentary relief isn’t universal, as China remains excluded from the benefits of the new tariff policy.

Wall Street Futures Decline Amid Tariff Announcements

Futures for the Dow Jones Industrial Average fell sharply by 1.6%, while S&P 500 futures dipped over 2%. The Nasdaq 100 futures experienced the most significant drop at 2.6%, indicating that American investors remain cautious despite a brief rally the previous day.

Trump’s 90-Day Tariff Suspension—Excluding China

In a surprising turn of events, President Trump declared a 90-day suspension of his proposed tariffs, just a day after global markets reacted negatively to the threat of a trade war. He revealed that more than 75 countries opted for negotiation over confrontation, allowing for a temporary tariff reduction to 10% for most nations during this period.

However, it’s a different story for China. Trump announced an immediate increase in tariffs on Chinese goods, escalating them from 104% to an astonishing 125%.

Asian Markets Celebrate the Temporary Respite

The news sparked an impressive rebound in Asian equity markets, which had been suffering losses in recent days.

• Nikkei 225 in Japan surged 9%, closing at 34,609, marking its highest single-day increase since August.
• The Topix index also rose significantly by 8%.
• In South Korea, the Kospi index climbed nearly 7%, representing its strongest performance in five years.

European Markets Follow Suit: Banks and Tech Lead

The optimism extended into Europe as well, with markets opening on a high note. The pan-European Stoxx 600 index jumped by nearly 7%, with all sectors showing gains.

• Banking stocks led the surge, rising by 10%.
• Technology firms also saw substantial gains, nearing 10%.
• Industrial shares increased by 9%.

This surge comes after the index concluded the previous session down 3.5%, its lowest point since January 2024.

Will This Relief Rally Last?

Despite the global uptick in markets, a sense of caution prevails among investors. The decline in Wall Street futures suggests lingering uncertainty. The exclusion of China from the tariff pause raises concerns about potential future trade tensions.

Additionally, bond markets reflect this anxiety, as yields on 10-year US Treasuries have dropped, reversing earlier gains of 34 basis points earlier in the week.

As the situation unfolds, investors remain watchful, weighing the temporary relief against the backdrop of ongoing uncertainties in international trade.