Asian stock markets surged Thursday following news that U.S. President Donald Trump would pause most of his newly imposed tariffs, a decision that sparked investor optimism and ignited a rally across global exchanges.
Japan Leads the Regional Surge
Japan’s benchmark Nikkei 225 skyrocketed 8.3% in morning trading, rising more than 2,000 points to 34,353.17 as soon as markets opened. Other Asian markets followed suit: Australia’s S&P/ASX 200 rose 4.7% to 7,722.90, South Korea’s Kospi jumped 5.5% to 2,419.37, Hong Kong’s Hang Seng added 3.7% to 21,003.84, and the Shanghai Composite edged up 1.5% to 3,232.86.
“It’s now a manageable risk, especially as global recession tail bets get unwound, and most of Asia’s exporters breathe a massive sigh of relief,” said Stephen Innes, managing partner at SPI Asset Management, describing the shift as “from fear to euphoria.”
Trump Announces Pause, Markets React
On Wednesday, U.S. stocks staged one of their best days in history. The S&P 500 soared 9.5%, the Dow Jones Industrial Average jumped 2,962 points (7.9%), and the Nasdaq composite leaped 12.2%. The rally came after Trump posted a message that reversed growing investor concerns.
“I have authorized a 90 day PAUSE,” Trump announced on social media, referencing over 75 countries he said have been negotiating on trade and had not retaliated against his recent tariff hikes.
Details Of Tariff Adjustment
Treasury Secretary Scott Bessent later clarified that the pause would apply to most of the United States’ major trading partners. However, he confirmed that the administration would maintain a 10% tariff on nearly all global imports.
China was a notable exception. Trump confirmed that tariffs on Chinese goods would increase to 125%, a move that could reignite tensions and lead to more market turbulence. While the announcement eased fears of a full-blown trade war for now, analysts warn that volatility is far from over.
Wall Street Finds Relief, But Risks Remain
Wednesday’s market rally helped lift the S&P 500 out of the danger zone of a bear market. The index is now down 11.2% from its all-time high, after nearly hitting the 20% threshold that marks a more prolonged downturn.
The strong bounce also came amid signs that investors had been losing confidence in Trump’s willingness to prioritize market stability. “The S&P 500, the index that sits at the center of many 401(k) accounts, came into the day nearly 19% below its record set less than two months ago.”
The rebound surprised some investors who had expected Trump to react sooner to the market’s decline. As one analyst noted, “That surprised many professional investors who had long thought that a president who used to crow about records for the Dow under his watch would pull back on policies if they sent markets reeling.”
Bond Market Calms After Rough Stretch
A relatively smooth auction of U.S. Treasurys also contributed to Wall Street’s rally. Rising Treasury yields had previously rattled investors, signaling increasing financial stress.
Trump acknowledged the bond market’s turbulence during Wednesday’s remarks: “getting a little queasy.”
Analysts cited several possible causes behind the higher yields, including hedge funds selling off Treasurys to cover stock losses, and international investors shedding U.S. government debt due to trade concerns. Both actions lower bond prices and push yields higher, adding to market unease.
