FTSE 100 Skyrockets Over 6% Following Trump’s Surprise Tariff Reversal

The FTSE 100 index posted a dramatic 6.2% surge on Thursday, marking its highest daily gain in years, as global markets rallied after U.S. President Donald Trump unexpectedly paused tariffs on all nations except China.

The London stock market crossed the 8,000-point mark for the first time since early 2020, reflecting renewed investor optimism and signaling a temporary reprieve from mounting trade tensions. Traders responded positively to Trump’s announcement, which pulled back on protectionist measures targeting key U.S. allies, while maintaining—and even intensifying—tariffs on Chinese imports.

In addition to the FTSE’s strong performance, Germany’s DAX rose 8%, while Wall Street also saw major rebounds. The S&P 500 climbed 9.5%, and the Nasdaq led the charge with an impressive 12.2% gain.

The White House justified the decision as a “strategic realignment,” aiming to strengthen economic alliances while continuing to pressure Beijing over what it described as unfair trade practices. The U.S. has raised tariffs on Chinese goods to 125%, prompting swift retaliation from China, which announced steep new tariffs—up to 84%—on American exports.

While tensions between Washington and Beijing remain high, the rollback of broader tariffs has reassured global investors, easing fears of a prolonged global trade slump. Analysts suggest that this shift could temporarily stabilize global trade flows and reduce inflationary pressures.

However, controversy quickly followed. Critics have raised concerns over President Trump’s recent social media posts encouraging investors to “buy the dip” just hours before the official announcement. Although the administration denies any intent to influence markets, calls for an investigation into potential market manipulation are growing louder.

Meanwhile, the World Trade Organization issued a warning, suggesting that a sustained U.S.-China trade war could cut bilateral trade by up to 80%, with severe consequences for global supply chains and emerging markets.

As the FTSE 100 celebrates its unexpected rebound, financial experts caution that volatility may persist. Whether this market upswing represents the beginning of a longer-term recovery—or merely a temporary reaction—will depend on how trade dynamics evolve in the coming weeks.