London’s FTSE 100 index rocketed this morning as a wave of euphoria swept round the world’s stock markets after Donald Trump backed down over most of his “Liberation Day” tariffs.
Within five minutes of the start of trading the City’s blue chip index of leading company shares was up 6.2% or 476.87 points to 8,156.35, one of the most dramatic rises ever seen on the London stock market.
It came after Asian markets soared overnight and an extraordinary session on Wall Street when all the main indices saw huge jumps.
The US President put a 90 day pause on retaliatory tariffs on 75 countries that had not retaliated yesterday after yields on US bonds spiked alarmingly.
One City economist said he risked a “Donald Truss” crisis similar to Britain’s mini-Budget disaster in September 2022.
However, he doubled down on levies against Chinese imports, increasing the tariff to 125% after Beijing slapped an 84% tariff on US goods coming into the country.
Nevertheless the broad ceasefire in the rapidly escalating trade war delighted markets after a week of bruising falls that threatened to become a full scale bear market.
Last night Japan’s Nikkei 225 index was up by a remarkable2648.45 points, or 8.35%, at 34,362.48. Most other south east Asian markets also saw strong recoveries.
But Hong Kong’s Hang Seng index saw a more modest rise of 2,85%, or 577.79 to 20,842.28 as worries persist about how the ongoing tit for tat tariffs between two two biggest economies will play out.
The City is also expected to see huge gains today with the futures market pointing to the FTSE 100 galloping up as much as 400 points, or 5%, to breach the 8000 mark once again.
The Asian recovery came after stocks on Wall Street rocketed after Donald Trump’s announcement of a pause.
The benchmark S&P 500 jumped 9.5%, on its best day since 2008.
The tech-heavy Nasdaq Composite rallied 12% for its second-best day on record and its biggest gain since 2001. The Dow Jones Industrial Average was up over 7.8%, or around 3,000 points.
It came after Trump posted on his Truth Social platform: “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,.”
The spectacular u-turn followed an alarming sell-off in US Government debt.
“Investors are speculating that Donald Trump will turn out to be Donald Truss,” said Simon French, chief UK economist at Panmure Liberum.
The mayhem played out just days after Trump told Americans not to be a “panican”.