European stock markets made significant gains this morning, following a similar recovery in Asian equities, after recent sharp losses caused by US President Donald Trump’s aggressive tariff policies. In mid-morning trading, major European indices saw positive movement, with Paris and Frankfurt up by 0.8%, while London’s FTSE 100 posted a 1.5% increase. Dublin’s ISEQ index surged by 2.8%, with Ryanair, Kingspan, and Greencoat Renewables among the top performers.
The rebound in global markets came after Asian stocks, including Japan’s Nikkei, which rebounded by 5.6%, moved off one-year lows. Despite this, investor sentiment remained cautious, as the markets still grapple with the uncertainty surrounding Trump’s tariffs. US stock futures also pointed higher, but many investors remained wary, hoping that Washington might be open to negotiating parts of the trade measures that have caused turmoil.
Tapas Strickland, head of market economics at National Australia Bank, noted a glimmer of hope with news that US Treasury Secretary Scott Bessent would lead trade negotiations with Japan. “Importantly, a little ray of sunshine is starting to emerge,” Strickland said, referring to the possibility of trade talks. However, he also pointed out that volatility remained exceptionally high, citing the VIX index spiking above 60 for only the second time since the COVID-19 pandemic.
Despite the positive movement in Japan, other Asian markets faced significant challenges. Taiwan’s benchmark dropped 5% following its worst fall on record, and Thai stocks fell nearly 6%. Indonesia, after a week-long holiday, saw a steep 9% loss. Meanwhile, Hong Kong’s Hang Seng Index gained 1.5%, recovering slightly from its sharpest drop since the 1997 Asian financial crisis. Mainland China’s blue-chip stocks also rose by 1%, thanks to intervention by state-backed investors, including the Central Huijin Investment.
The volatility continued as investors reacted to mixed headlines regarding US trade policies. A CNBC report suggesting President Trump was considering a 90-day pause on tariffs quickly sparked hope, but it was later denied by the White House. Meanwhile, Trump remained firm on his stance against China, threatening additional 50% tariffs unless Beijing retracts its retaliatory measures.
The trade tensions have had a profound impact on US business leaders, with JPMorgan Chase CEO Jamie Dimon warning that the ongoing trade war could lead to inflation and a slowdown in the US economy. In response, the European Commission proposed a “zero-for-zero” tariff deal to avert further escalation, while EU ministers prioritized negotiations and also retaliated with 25% tariffs on certain US imports.
In commodity markets, gold gained 0.4% to reach $2,995 per ounce, though still below its recent peak of $3,167.57. Oil prices also saw an uptick, with Brent crude futures rising 1.5% to $65.16 per barrel, and US West Texas Intermediate crude increasing 1.6% to $61.66. Meanwhile, cryptocurrency bitcoin rose by 1.2%, trading just below $80,000 after bouncing back from a five-month low of $74,445.
As global markets continue to navigate the uncertainty brought on by the US’s trade policies, investors are keeping a close eye on potential developments in US-China relations and the broader global economic impact.
