Market Commentary - Foreign Markets
10-Apr-2025 09:39
US Stocks Soar as Trump Announces 90-Day Tariff Pause; Nasdaq Jumps 12.2%
Stocks showed a lack of direction early in the day but skyrocketed after President Donald Trump announced a 90-day pause on new reciprocal tariffs on most countries to allow for negotiations. White House press secretary Karoline Leavitt told reporters that tariffs would be brought down to a universal 10% level during the 90-day pause. However, the pause will not apply to China, as Trump announced he is raising the tariff on the country to 125% due to the lack of respect they have shown to the world's markets. The higher tariffs on China come after the country retaliated to a previous increase by announcing it will raise its tariffs on US goods to 84% from 34% just after midnight on Thursday.
Semiconductor stocks skyrocketed in reaction to the latest tariff news, with the Philadelphia Semiconductor Index soaring by 18.7%. Substantial strength also emerged among airline stocks, as reflected by the 15.3% spike by the NYSE Arca Airline Index. Oil service stocks too moved sharply higher amid a significant rebound by the price of crude oil, driving the Philadelphia Oil Service Index up by 12.9%. Computer hardware, software and networking stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.
Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index plunged by 3.9% while China's Shanghai Composite Index shot up by 1.3%. Meanwhile, the major European markets all moved sharply lower. While the French CAC 40 Index dove by 3.3%, the German DAX Index tumbled by 3.0% and the U.K.'s FTSE 100 Index slumped by 2.9%.
In the bond market, treasuries extended the sharp pullback seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged 13.8 bps to 4.40%.
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