Global Markets Rebound as Investors Assess Trump’s Tariff Impact

After a turbulent start to the week, global markets saw a rebound on Tuesday, with Asian and European stocks recovering some losses and US futures pointing higher.

Investors remain cautious as they weigh the ongoing effects of President Donald Trump’s tariff policies on global trade and economic growth.

Following a sharp selloff on Monday, US stock futures showed improvement early Tuesday. Dow Jones futures were up nearly 2%, S&P 500 futures rose more than 1.5%, and Nasdaq futures climbed 1.3%.

Asian markets also rebounded. Japan’s Nikkei 225 surged over 6%, recovering from an 8% drop on Monday. South Korea’s KOSPI index edged up 0.3%, Australia’s S&P/ASX 200 rose 2.2%, and India’s NIFTY 50 climbed almost 2%. In Hong Kong, the Hang Seng Index, which suffered a steep 13% decline on Monday—its worst day since 1997—gained 1% on Tuesday, while the Shanghai Composite rose 1.4%.

European markets followed suit, with Britain’s FTSE 100 gaining 1.3%, Germany’s DAX rising 0.9%, and France’s CAC 40 adding 1.3%.

Monday’s trading session was particularly volatile. The Dow Jones Industrial Average experienced its largest-ever intraday swing, plummeting more than 1,700 points before rebounding by 2,595 points. The index ultimately closed down 349 points (-0.91%), while the S&P 500 slipped 0.23%. The tech-heavy Nasdaq was the only major US index to post slight gains (+0.1%).

The uncertainty stems from Trump’s escalating trade war. On Tuesday, China’s Commerce Ministry announced plans to retaliate against the latest round of US tariffs, warning it would “fight to the end.” Meanwhile, US Treasury Secretary Scott Bessent is set to lead trade negotiations with Japan, suggesting that currency policies could also become a focal point in trade discussions.

Amid market turbulence, corporate earnings remain in the spotlight. Levi Strauss shares surged over 10% after surpassing profit expectations and issuing a positive outlook for 2025. CVS Health gained more than 8% after appointing a new chief financial officer. Additionally, health insurance stocks rallied after the Centers for Medicare & Medicaid Services announced higher-than-expected Medicare payment increases for next year. Humana, for example, jumped nearly 15%.

This week, investors will be closely watching earnings reports from Delta Air Lines on Wednesday and major US banks on Friday. The government’s latest inflation data, due Thursday, could also influence the Federal Reserve’s interest rate decisions.

With input from CBS News, ABC News, the Associated Press, and Reuters.