Europe open: Shares surge after Trump U-turn on tariffs

(Sharecast News) - European markets surged at the open on Thursday as US President Donald Trump blinked in the face of a bond market sell-off and paused his swingeing tariff measures for 90 days amid accusations of market manipulation.

The pan-regional Stoxx 600 index was up 7% in early deals with all major bourses following suit. Germany's DAX and France's CAC-40 both rose 6.9% and Britain's FTSE 100 5%.

In yet another example of the capricious nature of Trump's policy making, the president late on Wednesday temporarily cut new tariff rates on imports to 10% for 90 days - with the exception of China - a massive u-turn from his prior statements that the levies would not be lifted.

The move prompted accusations from Democrats on the House Committee on Financial Services that Trump was "literally engaging in the world's biggest market manipulation scheme" after he posted on social media that it was "a great time to buy" just hours before his tariff pause announcement. A claim rejected by the White House.

However, the potential for a full-scale trade war with China was still firmly on the table. Escalating tit-for-tat measures in the last 24 hours now mean Beijing faces 84% in tariffs while Trump upped levies on Beijing to 125%.

"The White House has finally seen some sense and given a whole host of countries a 90 day pause, with reciprocal tariffs immediately lowered to 10%, while isolating China in a tense battle," said Hargreaves Lansdown analyst Matt Britzman.

"Was this Trump caving to pressure or his master plan all along? Who knows, but markets ripped on the news with the S&P 500 posting its 9th best day in history."

"We still don't know if this tariff strategy is going to do more harm than good, and this should not be confused with a resolution to the underlying impact on areas like inflation and global growth. But it does give a host of countries a chance to come to the table and barter for a deal, while offering companies some much needed time to make whatever supply chain adjustments they can."

There were winners all over the board after four days of selling. Tech firms and banks were among the major gainers.

On the downside, UK supermarkets were in the red after Tesco warned on earnings, while Barry Callebaut slumped after the Swiss chocolate maker lowered sales guidance amid high cocoa prices.

Reporting by Frank Prenesti for Sharecast.com