Sharp declines on Wall Street, while markets rebound in Europe and Asia

BarcelonaWall Street's main indices suffered widespread declines on Thursday, following Wednesday's sudden surge following US President Donald Trump's decision to temporarily halt heavy tariffs in dozens of countries and focus solely on China.

The about-face occurred in less than 24 hours: on Wednesday, the S&P 500 experienced its largest single-day percentage gain since 2008, and the Nasdaq technology index recorded its largest single-day increase since 2001. The gains were 5%; the S&P 500, 3.46%; and the Nasdaq, 4.31%. Despite Wednesday's increase, the S&P 500 and the Dow Jones are approximately 4% below the levels seen before the reciprocal tariffs were announced last week. The declines were precipitated after The White House clarified that the tariffs applied to China would be 145%., although this Thursday Trump himself said that he would "love" to close a trade agreement with Beijing, in addition to admitting that trade tariffs will cause "temporary costs" to the economy.

However, during Thursday morning, European and Asian stock markets have received with enthusiasm and gains the announcement by US President Donald Trump, to postpone the entry into force of the highest tariffs for ninety days, with the exception of the 10% "reciprocal" tariff. The Ibex 35 closed this Thursday its best session in three years. The Spanish stock market index rebounded 4.32% and recovered to 12,300 points. At the opening, the index had soared 8.52%, although it later moderated its rise and closed at 12,307.6 points, the largest increase since March 2022, and so far this year it is up 6.15%. All stocks in the index rose, led by the Catalan company Grifols, with an improvement of 7.68%.

The rest of the European stock markets also performed positively. London rose 3.04%; Paris, 3.83%; Frankfurt, 4.53%, and Milan, 4.72%. A barrel of Brent crude oil was trading at $63.43, down 3.15%, while West Texas Intermediate (WTI) crude oil stood at $60.03, down 3.72%.

Japan's main stock index, the Nikkei, soared 9.1%—the seventh-highest percentage gain in its history—to close at 34,609 points. In South Korea, the main index on the Seoul Stock Exchange, the Kospi, climbed 6.6%, and the Kosdaq technology index closed with a 5.9% gain. The South Korean stock exchange operator had to suspend scheduled purchases for five minutes in the early hours of trading due to the sharp market rally, which caused Kospi 200 futures to briefly jump 5%.

The advance was most pronounced on the Taipei Stock Exchange's benchmark index, the Taiex, which registered its largest jump ever. The Taiwanese index gained 9.25% and closed the session at 19,000 points. The island's main technology companies experienced strong gains during the early stages of the session, with gains by TSMC, MediaTek, Delta Electronics, and Foxconn standing out, quickly reaching the daily limit of 10%. Southeast Asian stock markets also moved in positive territory during the session, with Vietnam leading the gains, which were over 6%.

Impact in China

Although China has not been spared from Trump's protectionist offensive, the Asian giant's stock markets also ended the day in positive territory, with the benchmark indices of the Shanghai and Shenzhen stock exchanges advancing 1.1% and 2.2%, respectively. Meanwhile, the Hong Kong Stock Exchange's main index, the Hang Seng, rose 2%. As of today, China is already imposing tariffs of 84% on US products in response to the 125% levy the Republican president is imposing on Chinese goods.

This rebound in Asian and European markets follows the enthusiasm with which Wall Street greeted Trump's decision to temporarily halt tariffs yesterday. The Nasdaq rallied 12%, the S&P 500 rose 9.5%—its best day since 2008—and the Dow Jones nearly 8%.