Nikkei Soars 5.5% After Tariff-Fueled Plunge

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Nikkei Soars 5.5% After Tariff-Fueled Plunge \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Asian markets bounced back Tuesday after a turbulent start to the week sparked by President Trump’s escalating tariff threats. Japan’s Nikkei 225 surged 5.5%, leading gains across the region after heavy losses. Global investors remain jittery as tariff policy continues to drive market volatility.

Quick Looks

Nikkei 225 rose 5.5%, rebounding from Monday’s 8% plunge
South Korea’s Kospi gained 2%, while Australia and New Zealand markets climbed
Hong Kong stocks dropped 13.2% Monday, their worst day since 1997
U.S. markets had a chaotic Monday session, swinging wildly on tariff rumors
False report of 90-day tariff pause temporarily spiked stock gains
Dow plunged 1,700 points before rebounding 900, ending down 0.9%
S&P 500 swung from -4.7% to +3.4%, ending down just 0.2%
Trump reaffirmed tariff threats, despite investor hopes for a pause
Crude oil fell below $60, Bitcoin dropped under $79K amid global fears
Tariff tensions have hammered global markets for three days straight

Deep Look

Global Markets Recoil and Recover as Trump’s Tariff Agenda Sends Shockwaves

Markets in Asia opened sharply higher on Tuesday, clawing back some of the staggering losses seen across the globe on Monday. The rebound followed an especially volatile day on Wall Street, as investors reacted to President Donald Trump’s renewed threats to raise tariffs in his ongoing global trade war.

The Nikkei 225 index jumped 5.5% to 32,819.08 within the first half hour of trading in Tokyo, recovering from an 8% plunge the previous day—its steepest drop in years. The rally came despite deep uncertainty in global markets, as investors remain on edge over whether Trump will follow through on additional tariffs, or pivot to negotiations.

Asia Reacts to Wall Street’s Wild Swings

South Korea’s Kospi gained 2%, and stock exchanges in Australia and New Zealand also opened higher, reflecting a cautious sense of relief after the market chaos triggered by Trump’s weekend threats.

On Monday, Hong Kong’s Hang Seng index nosedived 13.2%, marking its worst single-day loss since the 1997 Asian financial crisis. That crash set the tone for widespread global losses as investors fled risky assets amid mounting fears of a prolonged economic conflict.

U.S. Markets Careen on Tariff Rumors and Clarifications

The Dow Jones Industrial Average sank 349 points, or 0.9%, while the S&P 500 dipped 0.2%. The Nasdaq eked out a 0.1% gain, supported by tech stocks. However, these final numbers tell only part of the story.

During intraday trading, the Dow plunged as much as 1,700 points, and the S&P 500 was down 4.7%, before staging a dramatic reversal. A false rumor that Trump might pause tariffs for 90 days briefly fueled a market surge, pushing the Dow up nearly 900 points and the S&P to a 3.4% gain—a swing of historic proportions.

The rumor was quickly debunked by a White House post on X (formerly Twitter), labeling it as “fake news.” Shortly after, Trump doubled down, suggesting more tariffs could be coming—especially targeting China, which retaliated last week with its own levies on American goods.

Trump’s Tariffs: Economic Tool or Political Gamble?

Trump has invoked a blend of national security, trade imbalance, and job restoration as justifications for the tariffs, part of what he has called “Liberation Day”—a global economic reset.

Critics argue the tariffs are disrupting global supply chains, raising prices for consumers, and threatening to derail economic growth. Supporters claim they are necessary to bring manufacturing jobs back to the U.S. and to correct long-standing trade deficits.

In his latest comments, Trump said he wants to reduce America’s trade imbalance—the difference between how much it imports versus exports—and views tariffs as leverage in negotiations with foreign governments.

Markets Swing as Hope and Fear Battle

Despite the day’s volatility, many investors still cling to the hope that diplomatic negotiations could de-escalate the trade war before the most severe tariffs are imposed. That optimism has helped curb even steeper market losses, but every new development has shown that global markets remain incredibly reactive to White House signals.

“That a false rumor can move trillions of dollars in investment shows how desperate investors are for any sign of tariff relief,” said a senior analyst at Morgan Stanley.

Markets have now endured three consecutive days of heavy losses, with no clear resolution in sight. Wall Street, Asia, and Europe all remain on high alert for further announcements.

Oil and Crypto Markets Show Stress

The uncertainty isn’t just affecting equities. Crude oil prices fell below $60 a barrel for the first time since 2021, reflecting concerns that trade disruptions will curb global demand for fuel.

Meanwhile, Bitcoin slipped below $79,000, down significantly from its all-time high above $100,000 set in January. While it held steadier than traditional markets last week, Monday’s chaos dragged the cryptocurrency lower, as risk aversion spread across asset classes.

Final Thoughts

Tuesday’s rebound in Asian markets offers temporary relief, but global financial stability remains precarious. With President Trump showing no signs of softening his tariff stance, and China digging in for the long haul, investors are bracing for continued volatility.

The coming days could determine whether this is just a temporary shakeup, or the start of a larger global downturn driven by trade disputes. For now, hope, fear, and presidential proclamations are driving the direction of trillions in global capital.