United States
Wall Street posted its strongest single-day performance since the global financial crisis, as President Donald Trump unexpectedly paused reciprocal tariffs on over 75 trading partners for 90 days. The S&P 500 roared back from near bear-market territory to jump 9.5%, its fourth-largest intraday swing since 1987, while the Nasdaq 100 surged 12% as investors rushed back into risk assets. The Dow Jones Industrial Average also gained 7.9%, buoyed by broad-based optimism that the worst of the trade tensions may have passed—at least temporarily.
The rebound followed days of intense selling that erased trillions from global equity valuations. Nearly every name in the S&P 500 rose, with technology and consumer discretionary leading the charge. A record 30 billion shares worth $1.5 trillion changed hands across US stock exchanges, highlighting the scale of investor repositioning.
The turnaround came after Trump declared the bond market “beautiful” and urged Americans to “stay calm and keep investing,” suggesting tariff exemptions may be considered for certain US firms. While tariffs on China were simultaneously hiked to 125%—a move Trump justified as retaliation for Beijing’s “lack of respect”—investors focused on the broader reprieve, interpreting it as a constructive step toward stabilising global trade relations.
Despite the optimism, some analysts struck a cautious tone. Morgan Stanley’s Daniel Skelly warned against assuming the tariff saga is over, noting, “The clouds parted today, but the storm isn’t necessarily gone.”
US bond yields reflected the shift in sentiment. The yield on the 10-year Treasury rose four basis points to 4.33%, while the 2-year briefly spiked above 4%, as traders dialled back expectations for imminent Federal Reserve rate cuts.
Europe
European markets failed to capitalise on Wall Street’s euphoric rally, instead sinking to their lowest levels since January, with European equity markets closing before the announced tariff pause. The Stoxx Europe 600 slid 3.5% as retaliatory tariffs from both the EU and China took effect, targeting US goods across multiple sectors.
Healthcare bore the brunt, with drugmakers Novo Nordisk and Novartis losing more than 6% apiece after Trump signalled a “major tariff” on pharmaceutical imports was imminent. The broader market struggled under the weight of geopolitical tension, as nearly every stock in the index ended the session in the red.
While investors remain hopeful for negotiations, strategists warned of persistent volatility. “This isn’t a buying opportunity yet,” said RBC Wealth Management’s Frederique Carrier. “We’re still looking for clarity on where tariffs will ultimately land.”
Yields in the region diverged modestly, with Germany’s 10-year slipping four basis points to 2.59%, while the UK 10-year surged 17 basis points to 4.78%, reflecting differing risk assessments.
Australia
Australian shares are set to open sharply higher, with ASX 200 futures pointing to a 436-point, or 5.89%, gain at the open, driven by Wall Street’s blistering rally and a risk-on rebound in commodities and currencies. The sharp turnaround follows a session in which the local market slumped 1.8% on fears of escalating US-China tensions, wiping $40.5 billion from the index.
Miners and energy stocks had led the previous session’s losses, as iron ore touched a new seven-month low and oil briefly fell below USD 60 per barrel. However, that pressure is expected to ease today following gains in global oil benchmarks and the AUD jumping 3.2% to US 61.48¢—its largest single-session rally in years.
Gold miners may also benefit after the precious metal surged 3.7% to USD 3,094.91 an ounce, while Bitcoin jumped 7.2% to USD 82,321.
RBA Governor Michele Bullock is due to speak tonight in Melbourne, though markets are likely to focus more heavily on upcoming inflation data out of China and the US.
Commodities
Oil rebounded strongly after days of declines, with Brent settling 4.7% higher at USD 65.80 a barrel and WTI not far behind. Gold extended its recent rally, supported by falling real yields and safe-haven flows amid continued geopolitical uncertainty. Iron ore remained under pressure, slipping a further 1.1% to USD 93.75 a tonne, as Chinese demand concerns linger.
Economic Calendar
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RBA Governor Michele Bullock to speak at 8:00pm AEDT
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China March CPI & PPI – 11:30am AEDT
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US March CPI – 10:30pm AEDT
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US Weekly Jobless Claims – 10:30pm AEDT
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
