Global stocks on Tuesday clawed back a fraction of their enormous recent losses, with the turmoil from the Trump administration’s announcement of sweeping global tariffs last week calming in financial markets if not in the political arena.
Most major indexes in Europe and Asia climbed and pre-market trading in the U.S. appeared to be cautiously positive, even as America’s war with China deepened, with Beijing announcing it will “fight to the end” after President Donald Trump threatened to an additional 50% tariff on Chinese goods.
In U.S. pre-market trading, which gives an indication of how markets will open, the S&P 500, the tech-heavy Nasdaq and the Dow Jones Industrial Average all edged up by between 1% and 2% after a wild trading day Monday left investors uncertain about the impact of Trump’s aggressive tariffs on the global economy, the fallout from which has has week wiped $6.6 trillion from markets.
Stocks in Europe rose, with the Stoxx 600 — the index of Europe’s largest companies — up 1.4% at around 6:30 a.m. ET after it shed 4.5% Monday. The major indexes in the U.K., Germany, France and Italy all rose by between 1% and 2% after plunging by double-digit percentages over the past week.
Those reversals echoed similar gains in Asia, where major indexes in mainland China, Hong Kong South Korea climbed between 1% and 3% and Japan’s Nikkei 225 index jumped 6%, paring most of its losses Monday that were so sharp and severe they triggered automatic circuit-breakers that prevent markets crashing.
One factor behind that increase may be the Japanese government’s confirmation that it has agreed to designate a cabinet member to take on trade talks with the Trump administration.
While financial markets were calmer Tuesday, the Trump administration’s levies continued to cause ructions across global geopolitics.
European Commission President Usula von der Leyen said Trump was offered a “zero for zero” tariff deal by the European Union, which the U.S. president later rejected.
Despite initial speculation that China might win a postponement on the introduction of tariffs, Trump said late Monday that the United States would impose 50% tariffs on China if Beijing did not reverse its 34% reciprocal tariffs.
China appeared to double down on its own position Tuesday, with its Commerce Ministry saying it will “fight to the end” if Trump’s additional tariffs on Chinese goods came into effect, calling its previous countermeasures “entirely justified.”
Trump said he is not looking to pause his tariffs before they go into effect and threatened that the new 50% duty on China, that would bring the total of U.S. tariffs on China up to 104% and go into effect on Wednesday if Beijing did not withdraw its 34% tariffs on all U.S. goods.
“Additionally, all talks with China concerning their requested meetings with us will be terminated!” Trump wrote Monday on Truth Social. “Negotiations with other countries, which have also requested meetings, will begin taking place immediately.”
Trump also appeared unfazed by the market’s volatility that has stoked fears of a recession, especially as Beijing’s retaliatory tariffs are scheduled to take effect Thursday.
“I don’t mind going through it because I see a beautiful picture at the end,” he told reporters at White House on Monday, adding that he is “not looking” to pause tariffs, despite the uproar among investors and the business community.
“Tariffs will make this country very rich,” he insisted.
