FTSE 100 soars as relief rally washes over global markets after tariff pause

The UK’s FTSE 100 has surged higher as a relief rally washed over global stock markets, after Donald Trump announced a 90-day tariff pause for most countries.

European stocks were also rocketing higher following a rebound for US and Asian markets.

The FTSE 100 soared by more than 6% shortly after markets opened on Thursday, with Barclays leading the charge with gains of as much as 28% before paring back to around 10%.

The index was still about 4% higher later in the morning.

Germany’s Dax index shot up about 5.9%, and France’s Cac 40 was soaring around 5.4%.

Thursday’s rally was sparked by Mr Trump declaring on Wednesday night that he would delay tariffs on most nations for 90 days, while raising his tax rate on Chinese imports to 125%.

The decision came in the face of intense pressure created by volatile financial markets that had been pushing Mr Trump to reconsider his plans.

It is also expected to give the administration more time to negotiate deals with the US’s trading partners.

People had seen the value of their investments and pensions drop sharply as a result of a steep drop in the prices of stocks and shares and other assets around the world.

The US’s S&P 500 index, which tracks the country’s leading listed companies, has suffered sharp drops in recent days. But on Wednesday, it soared by 9.5%, reversing a significant proportion of losses.

The Dow Jones also closed about 7.9% higher, and the Nasdaq 12.2% higher, when US markets closed on Wednesday.

Mr Trump’s pause has not completely eliminated taxes on goods into America, with all countries now expected to pay a 10% levy, instead of the reciprocal rates Mr Trump’s administration had originally set out.

Meanwhile, a trade war with China continues to escalate with the two countries going back and forth by hiking retaliatory tariffs.

Michael Field, chief equity strategist for investment research firm Morningstar, said: “The news of Trump backing down from tariffs is a big positive for markets, with many saying that the worst-case scenario is now off the table.

“But the overhang of the trade war is likely to persist for some time.

“Markets have already responded positively to the news, but investors remain weary of increasing tensions with steep tariffs remaining for China.”