European markets are poised for a powerful rally at the open, with trading set to begin in less than 30 minutes.
Futures indicate London’s FTSE 100 will jump nearly 400 points, a gain of more than 5%, while Germany’s DAX is expected to surge 7% as investors react positively to Donald Trump’s decision to delay new tariffs for 90 days. Under the revised plan, most countries—excluding China—will face a new baseline tariff of 10%.
Financial stocks are also expected to shine, with Eurostoxx Banks index futures up more than 10%.
The optimism follows a dramatic turnaround on Wall Street last night, where the S&P 500 posted its third-strongest daily gain since World War II.
Deutsche Bank strategist Jim Reid summed up the dramatic shift in market sentiment:
“Market turmoil flipped to euphoria yesterday after President Trump announced a 90-day pause on reciprocal tariffs for all countries except China, marking a significant de-escalation from last week’s aggressive tariff stance. The news sparked a powerful relief rally, with the S&P 500 surging 9.52%—its strongest single-day gain since October 2008. Other risk assets also rallied, including credit and commodities, while gold jumped 3.33%, its biggest daily rise since 2023. Meanwhile, 2-year Treasury yields climbed 18.2 basis points, the largest move in six months.”
Trump’s announcement detailed a 90-day suspension of reciprocal tariffs on non-retaliating countries, who will instead face a baseline 10% tariff. China, however, was singled out for harsher treatment, with its tariff rate hiked to 125%, up from 104% the previous day. This was in direct response to China’s earlier move to impose 84% tariffs on U.S. goods, effective immediately.
