European stocks rallied after US President Donald Trump paused plans to implement higher reciprocal tariffs on dozens of trade partners, easing concerns about a global trade war.
In Dublin, the Euronext was up 4 per cent by 9.50am, with many of the major stocks gaining between 3 and 5 per cent. AIB and Bank of Ireland added 7 per cent each, while travel stocks such as Dalata and Ryanair climbed by almost 7 per cent and 5 per cent respectively.
The Stoxx Europe 600 Index was 6 per cent higher by 8.50am in London, with all sectors in the green and banks and miners leading gains. France’s CAC 40 jumped 6 per cent and Germany’s DAX soared 7 per cent. If the gains hold to the end of the day, European stocks will have pared back about half of the losses incurred since a record high close in early March.
European stocks have been under pressure, entering a correction, since Trump announced widespread levies last week, including higher tariffs on the European Union. Trump announced a 90-day tariff reprieve Wednesday, while ramping up duties on China.
There’s “some relief but the 125 per cent tariff on imports from China and the uncertainty around negotiations and other side effects of this volatility could keep a risk premium in most assets,” said Rajeev De Mello, chief investment officer at Gama Asset Management. Mr Trump “will be reluctant to allow a worse episode but I would rather fade the risk-on moves from these levels as the market finds a new equilibrium”.
Mr De Mello sees stocks trading within a 10 per cent range over the next few weeks.
Mr Trump’s announcement sent US stocks up by the most since 2008 on Wednesday, though the S&P 500 remains down more than 7 per cent so far this year. The Stoxx Europe 600 has fallen around 2 per cent in 2025, wiping out a strong rally over the first quarter.
“This isn’t the end of the trade war, far from it,” said Susana Cruz, a strategist at Panmure Liberum. “The economic damage is baked in: no one’s rushing to invest in the US, inflation’s ticking higher, and global trade is taking a hit.” - Additional reporting: Bloomberg
