Historic Market Turnaround After Trump Suspends Tariffs

The S&P 500 posted its biggest daily gain since 2008 after President Trump suspended most new tariffs for 90 days, sparking a global relief rally. European and Asian markets soared early Thursday tracking the gains on Wall Street. US stock futures have tipped lower amid lingering trade tensions given China’s exclusion from the tariff pause. US Treasury yields retreated following a sharp bond selloff earlier in the week. 

Equities 

The FTSE 100 fell 2.9% on Wednesday, reversing its gains from the previous session as tariff tensions between the US and China deepened. The index was dragged lower by heavy losses in the pharmaceutical sector after US President Donald Trump signalled major new tariffs on pharmaceutical imports. AstraZeneca shares dropped 6.8% and GSK fell 5.7%. The FTSE 250 also declined, down 2.5%, as investor sentiment weakened across UK equities. 

Among other notable UK movers, JD Sports rose 9.5% after the retailer reaffirmed its full-year profit forecast, suggesting it would meet expectations despite wider market pressures. Assura climbed 5.1% following confirmation that a consortium led by KKR and Stonepeak would acquire the healthcare REIT for £1.61 billion.  

Energy stocks were also under pressure, with oil prices falling as much as 7% during the day before recovering. BP and Shell both traded lower as a result, tracking declines in crude markets. Utilities fell 2.2%, weighed down by a sharp rise in gilt yields, while industrial metal miners dropped 2.2% as copper prices slipped to an eight-month low.  

In the US, the S&P 500 surged 9.5% for its biggest one-day gain since October 2008, after President Trump announced a 90-day pause on most new tariffs. However, this did not apply to China, where import duties were increased to 125%. The Nasdaq jumped 12.2%, its second-largest daily percentage gain on record, while the Dow Jones rose 7.9% (nearly 3000 points!).  

Technology stocks led the rally. Nvidia gained 18.7%, and Apple rose 15.3%, making them the biggest contributors to the index’s gains.  

Trading volumes were also historically high, with 30.5 billion shares changing hands, well above the recent average. Treasury markets calmed slightly, with strong demand in the 10-year bond auction helping to ease investor concerns. 

Forex & Commodities 

The US dollar strengthened on Wednesday against traditional safe-haven currencies after President Trump announced a 90-day pause on most new tariffs, helping ease immediate trade concerns. The greenback gained 1.2% against the Japanese yen, rising to 148.80, and advanced 1.14% versus the Swiss franc to 0.8569.  

However, the dollar fell 1% against the offshore yuan, with the Chinese currency rising to 7.349 per dollar following reports that China's central bank asked state-owned banks to slow US dollar purchases to support the yuan. The euro firmed 0.11% to $1.09685, helped by a coalition agreement in Germany between Friedrich Merz’s conservatives and the Social Democrats. 

Gold climbed 1.2% to $3,120.01 an ounce. Tariffs and weaker growth expectations continue to drive safe-haven demand. The metal has risen over 18% this year, supported by central bank buying, investor inflows into gold ETFs, and concerns about persistent inflation. Silver rose 0.7% to $31.24 an ounce, while platinum and palladium traded near flat. 

Oil prices slipped early Thursday after a volatile Wednesday session where both benchmarks briefly fell 7% before settling up around 4%. Demand concerns persist, with risks to growth from ongoing trade tensions. Meanwhile, supply developments were mixed: the Keystone Pipeline remains shut following a spill, while the Caspian Pipeline Consortium resumed partial operations. US crude inventories rose by 2.6 million barrels, almost twice the expected increase.