A week of chaos: How Trump sent markets on a rollercoaster ride

Are there signs the storm created by Donald Trump’s tariffs could be calming?

Global markets have rebounded following the US president’s announcement of a 90-day pause on most tariffs, prompting hopes that a wider financial crisis could perhaps be avoided.

The turnaround came less than 24 hours after steep new tariffs kicked in on most US trading partners and followed the most intense episode of financial market volatility since the early days of the COVID-19 pandemic.

But volatile times could still be ahead, with the prospect of the tariffs being reinstated in 90 days and tensions between the US and China.

Let’s have a look at how markets have fared over the last few days.

In the UK, the FTSE 100 index, which tracks the UK’s stock market, rose more than 6% on Thursday.

UK stocks followed similar rallies for European markets this morning and Asian markets overnight.

But while the FTSE has rebounded following its downturn in earlier days, the index is still far below where it was in the days before Mr Trump’s tariffs came into force.

On Wednesday, FTSE 100 had finished down by 2.92% – its lowest level since March 2024, 13 months ago.

Wall Street had to anxiously watch as the Nasdaq – one of the key indexes tracking the US stock market – plummeted over the last few days.

Many financial sector workers surely had to wonder if the president would hold the course with his incendiary tariffs.

Before the U-turn, the upheaval had erased trillions of dollars from the market and also led to a surge in US government bond yields – effectively the price at which the US government borrows money – a move that appeared to catch the president’s attention.

There was relief, then, when Mr Trump announced the 90-day reprieve on the tariffs, which sent the Nasdaq share index rising more than 12%.

However, it too still lags behind pre-“Liberation Day” levels.

In China, which has had its tariffs increased rather than lifted unlike the rest of the world, the Shanghai Composite has risen slightly.

Goldman Sachs revised down its forecasts for China’s GDP growth to 4% in 2025, from previous projections of 4.5%, citing the negative effects of tariffs.

Meanwhile, China’s yuan currency hit its lowest level against the dollar on Thursday since the global financial crisis.