Analysts had expected the regional comeback given that US stocks had one of their best days in history on Wednesday on a euphoric Wall Street, where investor hopes had run high that Trump would tone down the tariffs.

On Thursday, Japan’s benchmark Nikkei 225 jumped 8.3% in morning trading to 34,353.17, zooming upward as soon as trading began. Australia’s S&P/ASX 200 soared 4.7% to 7,722.90. South Korea’s Kospi gained 5.5% to 2,419.37. Hong Kong's Hang Seng added 3.7% to 21,003.84. The Shanghai Composite edged up 1.5% to 3,232.86.

Stephen Innes, managing partner at SPI Asset Management, called the reaction “from fear to euphoria.”

“It’s now a manageable risk, especially as global recession tail bets get unwound, and most of Asia’s exporters breathe a massive sigh of relief,” he said, referring to the tariffs on China, which Trump has kept.

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From fear to euphoria

On Wall Street, the S&P 500 surged 9.5%, an amount that would count as a good year for the market. It had been sinking earlier in the day on worries that Trump’s trade war could drag the global economy into a recession. But then came the posting on social media that investors worldwide had been waiting and wishing for.

“I have authorised a 90 day PAUSE,” Trump said, after recognising the more than 75 countries that he said have been negotiating on trade and had not retaliated against his latest increases in tariffs.

Treasury Secretary Scott Bessent later told reporters that Trump was pausing his so-called ‘reciprocal’ tariffs on most of the country’s biggest trading partners, but maintaining his 10% tariff on nearly all global imports.

China was a huge exception, though, with Trump saying tariffs are going up to 125% against its products. That raises the possibility of more swings ahead that could stun financial markets. The trade war is not over, and an escalating battle between the world’s two largest economies can create plenty of damage. US stocks are also still below where they were just a week ago, when Trump announced worldwide tariffs on what he called “Liberation Day.”

But on Wednesday, at least, the focus on Wall Street was on the positive. The Dow Jones Industrial Average shot to a gain of 2,962 points, or 7.9%. The Nasdaq composite leaped 12.2%. The S&P 500 had its third-best day since 1940.

The relief came after doubts had crept in about whether Trump cared about the financial pain the US stock market was taking because of his tariffs. The S&P 500, the index that sits at the center of many accounts, came into the day nearly 19% below its record set less than two months ago.