Global Markets Soar as Trump Delays Tariffs in 90-Day Trade Truce

Key Points

• Japan’s Nikkei 225 jumps 8% as tariff pause triggers rally
• Dow Jones records 7.8% gain - best since 2020
• China tariffs hit 125% despite broader trade ceasefire
• Tech-heavy Nasdaq soars 12.1% on renewed investor confidence

[p]Global financial markets breathed a collective sigh of relief Thursday as President Trump’s surprise tariff suspension reversed weeks of bearish sentiment. The 90-day reprieve for most trading partners sparked immediate rebounds across Asian markets, with Japan’s TOPIX index climbing 7.6% and South Korea’s Kospi gaining 6%. Analysts attribute the surge to reduced supply chain disruption risks for automotive and semiconductor sectors.[/p][p]While the White House framed the decision as a strategic pause, tensions with China reached new heights. Beijing now faces cumulative tariffs of 125% on exports to the US - up from 95% last quarter. This escalation comes despite China’s 84% retaliatory tariffs on American agricultural products announced Wednesday. Market watchers note the contradictory trends: relief for most markets versus heightened US-China trade war risks.[/p][p]The regional impact proved most dramatic in Taiwan, where the Taiex index rocketed 9.25%. Local analysts point to Taiwan Semiconductor Manufacturing Company’s (TSMC) 14% stock surge as driving gains. As the world’s largest contract chipmaker, TSMC stands to benefit from stabilized tech sector demand under the tariff pause. This case study highlights how trade policy shifts disproportionately affect semiconductor-dependent economies.[/p][p]US markets mirrored Asian gains after Wednesday’s historic rally. The Dow’s 2,962-point surge marked its largest single-day gain since pandemic-era volatility. However, early Thursday futures dipped 0.34%, suggesting traders remain cautious about long-term resolution. Banking stocks led initial gains, with JPMorgan Chase and Goldman Sachs both climbing over 11% during Wednesday’s session.[/p][p]Three critical industry insights emerge from the rally: First, energy stocks underperformed benchmarks despite broader gains, reflecting lingering concerns about Chinese demand. Second, currency markets showed unusual stability compared to previous trade war developments. Third, small-cap stocks surged 9.2% versus large-cap’s 8.1% growth, indicating renewed risk appetite among retail investors.[/p][p]Market volatility indexes plunged 38% following the announcement, their sharpest drop since 2021. This suggests professional traders see reduced near-term risk, though options activity shows heavy hedging through July contracts. “This is a tactical retreat, not a ceasefire,” warned Morgan Stanley strategist Lisa Chen. “The 90-day window merely postpones supply chain decisions rather than resolving fundamental disputes.”[/p]