By Rae Wee
SINGAPORE (Reuters) -Global stocks rallied, the dollar found its footing and a manic bond selloff stabilised on Thursday after U.S. President Donald Trump said he would temporarily lower the hefty duties he had just imposed on dozens of countries.
Following a days-long market rout that erased trillions of dollars from global stocks and jolted U.S. Treasury bonds and the dollar, Trump on Wednesday announced a 90-day pause on many of his new tariffs in a shock reversal.
The move sent Wall Street’s “Magnificent Seven” stocks surging again and tacking on more than $1.5 trillion in market value overnight. The S&P 500 and Nasdaq Composite Index clocked their biggest daily percentage gains in more than a decade.
But U.S. futures turned lower on Thursday, with Nasdaq futures falling 0.7% and S&P 500 futures down 0.3%.
The dollar logged its largest one-day jump against the yen in two months and in five against the Swiss franc in the previous session. The greenback though pared some of those gains in Asia on Thursday, highlighting market uncertainty over the longer term outlook and as the Sino-U.S. trade war showed few signs of abating. [FRX/]
“I think the initial move was just massive short cover, and this has given the world a bit of a breathing space, except for China… because markets were starting to price in the worst-case scenario,” said Khoon Goh, head of Asia research at ANZ.
“But now that the dust has settled, I think markets will seem to sort of figure out where to go from here.”
In Asia, however, investors still cheered the temporary tariff reprieve. Japan’s Nikkei surged 8%, while European futures shot up.
EUROSTOXX 50 futures and DAX futures climbed roughly 8% each. FTSE futures jumped 5.5%.
Trump’s reversal on the country-specific tariffs is not absolute. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place.
He also heaped pressure on China, saying he would raise the tariff on Chinese imports to 125% from the 104% level that came into effect on Wednesday.
China on Wednesday raised additional duties on American products to 84% and imposed restrictions on 18 U.S. companies, mostly in defence-related industries.
Still, Chinese equity markets opened on a strong note on Thursday, with CSI300 blue-chip index rising 1.6%. Hong Kong’s Hang Seng Index jumped 3.3%.
“I guess at least the relief is now global trade won’t grind to a complete halt,” said Wong Kok Hoong, head of equity sales trading at Maybank.
