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| Australian stock market surges but investors warned ‘we’re not out of the woods just yet’ | Australian stock market surges but investors warned ‘we’re not out of the woods just yet’ |
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| Global economy ‘faces enormous risk in weeks and months ahead’ and Wednesday’s bounce may be a ‘cruel bear market’ rally, economist says | Global economy ‘faces enormous risk in weeks and months ahead’ and Wednesday’s bounce may be a ‘cruel bear market’ rally, economist says |
| Donald Trump’s decision to pause steep tariffs against most nations has ignited a share market rally that erased some of the heavy losses suffered over the past week, even as Australia eyes an escalating trade war between the world’s two biggest economies. | Donald Trump’s decision to pause steep tariffs against most nations has ignited a share market rally that erased some of the heavy losses suffered over the past week, even as Australia eyes an escalating trade war between the world’s two biggest economies. |
| Wall Street soared overnight after Trump unveiled a 90-day pause on tariffs above 10% on dozens of countries, with the notable exception of China. | Wall Street soared overnight after Trump unveiled a 90-day pause on tariffs above 10% on dozens of countries, with the notable exception of China. |
| Australia’s position, along with those of the UK and New Zealand, are unchanged given they remain subject to the US’ “baseline” 10% tariff. | Australia’s position, along with those of the UK and New Zealand, are unchanged given they remain subject to the US’ “baseline” 10% tariff. |
| The S&P/ASX 200 closed up 4.5% on Thursday, at 7,709 points, after giving away some of its early gains. | The S&P/ASX 200 closed up 4.5% on Thursday, at 7,709 points, after giving away some of its early gains. |
| The lift added $100bn in value to Australian shares, although the benchmark is still lower than levels recorded one week ago, shortly after the new tariff regime was unveiled. | The lift added $100bn in value to Australian shares, although the benchmark is still lower than levels recorded one week ago, shortly after the new tariff regime was unveiled. |
| Major miners BHP and Rio Tinto, which had been weighed down over concerns demand would drop for commodities if the global economy entered into a recession, helped lead the rally, with both stocks up more than 5%. | Major miners BHP and Rio Tinto, which had been weighed down over concerns demand would drop for commodities if the global economy entered into a recession, helped lead the rally, with both stocks up more than 5%. |
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| The surge represented the strongest trading day since 2020, although investment groups were quick to advise caution. | The surge represented the strongest trading day since 2020, although investment groups were quick to advise caution. |
| ANZ downgraded its price targets for energy and metal markets, which are two important components of the ASX. | ANZ downgraded its price targets for energy and metal markets, which are two important components of the ASX. |
| “The unpredictability of US trade policy is likely to have ongoing impacts on investment and trade, as companies and consumers wait for clarity,” ANZ said in a research note. | “The unpredictability of US trade policy is likely to have ongoing impacts on investment and trade, as companies and consumers wait for clarity,” ANZ said in a research note. |
| “Importantly, the escalation of trade tension between the US and China shows no sign of abating.” | “Importantly, the escalation of trade tension between the US and China shows no sign of abating.” |
| Australia’s close resources ties to China also make it susceptible to any economic slowdown sparked by the escalating tariff wars between Washington and Beijing. | Australia’s close resources ties to China also make it susceptible to any economic slowdown sparked by the escalating tariff wars between Washington and Beijing. |
| The chief economist at Betashares, David Bassanese, warned investors that the global economy “faces enormous risk in the weeks and months ahead” and that the bounce may be a “cruel bear market” rally. | The chief economist at Betashares, David Bassanese, warned investors that the global economy “faces enormous risk in the weeks and months ahead” and that the bounce may be a “cruel bear market” rally. |
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| “We’re not out of the woods just yet,” Bassanese said. | “We’re not out of the woods just yet,” Bassanese said. |
| A bear market rally refers to a temporary increase in share prices in an otherwise falling market. | A bear market rally refers to a temporary increase in share prices in an otherwise falling market. |
| Trump’s stunning tariff reversal came shortly after clear signs of market ruptures appeared, with investors selling off US government bonds, which have historically been one of the world’s safest financial assets. | Trump’s stunning tariff reversal came shortly after clear signs of market ruptures appeared, with investors selling off US government bonds, which have historically been one of the world’s safest financial assets. |
| Asked why he had ordered the pause, the US president told reporters: “People were jumping a little bit out of line. They were getting yippy.” | Asked why he had ordered the pause, the US president told reporters: “People were jumping a little bit out of line. They were getting yippy.” |
| While traders cheered the tariff reversal, the effect on some market sectors was unchanged. The 25% levy on steel and aluminium imports to the US is still in place, and Trump has said he will introduce a “major” tariff on all pharmaceutical imports. | While traders cheered the tariff reversal, the effect on some market sectors was unchanged. The 25% levy on steel and aluminium imports to the US is still in place, and Trump has said he will introduce a “major” tariff on all pharmaceutical imports. |
| The Australian dollar recovered significant ground on Thursday, rising to US61.8c late in the day, after threatening to plunge below the 59c barrier earlier this week. | The Australian dollar recovered significant ground on Thursday, rising to US61.8c late in the day, after threatening to plunge below the 59c barrier earlier this week. |