Why is the ASX 200 going gangbusters today?

The ASX 200 is heading for its biggest day of gains in years. But why?

| More on:
Green arrow with green stock prices symbolising a rising share price.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's a sea of green on the S&P/ASX 200 Index (ASX: XJO) today.

You haven't heard that for a while, have you?

In a welcome reprieve for frazzled investors, the ASX 200 is up a whopping 5.2% in morning trade on Thursday, with the vast majority of stocks joining in the rally.

Taking a look at the biggest three, Commonwealth Bank of Australia (ASX: CBA) shares are up 3.6% at $154.43, the BHP Group Ltd (ASX: BHP) share price is up 6.6% at $36.41, and shares in biotech giant CSL Ltd (ASX: CSL) are up 5.1% at $245.53.

Boom!

What's putting a rocket under ASX 200 shares today?

As you're likely aware, the ASX 200 and stock markets worldwide have been under heavy pressure in recent weeks amid a raft of global tariffs unleashed by US President Donald Trump.

This had pushed the Nasdaq Composite Index (NASDAQ: .IXIC) into official bear market territory, while the S&P 500 Index (SP: .INX) was within a whisker of joining that unwanted categorisation.

But yesterday, both the Nasdaq and S&P 500 enjoyed their strongest day of gains in more than 20 years.

The S&P 500 closed up 9.5% overnight, while the tech-heavy Nasdaq gained a blistering 12.2%. Elon Musk's Tesla Inc (NASDAQ: TSLA) soared 22.7%, while shares in AI chip maker Nvidia Corporation (NASDAQ: NVDA) leapt 18.7%.

The ASX 200 is following US markets higher today after Trump announced he would pause the big uptick in tariffs he'd placed on scores of nations for 90 days.

Most countries will continue to be hit with the 10% baseline duties that came into effect over the weekend. Of potential concern to Australia, Trump announced that tariffs on China will be increased to an eyewatering 125%.

While uncertainty remains the name of the game for now, investors would have done well to heed Trump's social media post, released early yesterday morning US time. "This is a great time to buy," he said.

Indeed.

According to the Bloomberg Billionaires Index, the world's richest people grew $304 billion richer on Wednesday, a record one-day haul.

What are the experts saying?

Here's what these leading market experts had to say about the Trump tariff reprieve sending US stocks and the ASX 200 rocketing (quotes courtesy of Bloomberg).

Mark Malek, chief investment officer at Siebert, noted:

I am not ready to say this is the bottom, but this is a sign that he is ready to make a deal. There has been a lot of damage done already to market structure and investor sentiment, we will need to work that

Cayla Seder at State Street Global Markets added:

Well, first, wow. This is certainly a signal of welcomed reprieve, but I don't believe this is a buy everything rally, sticking to high quality parts of the market to ride out continued uncertainty is reasonable here.

And Chris Zaccarelli at Northlight Asset Management said:

It is very difficult to trade this market because the news changes on a dime, so it's best to have a longer-term investment plan in place and take advantage of quality companies trading at a discount, when the opportunity arises.

With today's big intraday boost factored in, the ASX 200 is out of official correction territory, currently down 9.3% since its all-time closing high on 14 February.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Nvidia, and Tesla. The Motley Fool Australia has recommended BHP Group, CSL, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Friday

Will the market end the week on a high? Let's find out.

Read more »

A piggy bank on the cloud in the blue sky symbolising a record high share price.
52-Week Highs

12 ASX 200 shares that smashed historical peak prices today

Twelve ASX 200 shares rose to new multi-year peaks in an otherwise quiet day of trading.

Read more »

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors saw another day of mild gains for the stock market this Thursday.

Read more »

Two boats on the water with crates with the words trade war in the middle.
Share Market News

Trump's tariffs blocked by trade court: Which ASX 200 stocks could benefit the most?

These 3 ASX 200 stocks have heavy tariffs exposure.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Broker Notes

How this undervalued ASX All Ords share could rocket 80% in a year

A leading fund manager expects a big turnaround for this beaten-down ASX All Ords stock.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Gainers

Why Champion Iron, Clarity Pharmaceuticals, St Barbara, and Woodside shares are charging higher today

These shares are having a good session today. But why are investors buying them?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Black Cat, Boss Energy, and Soul Patts shares are falling today

These shares are falling on Thursday. Let's find out why.

Read more »

A car dealer stands amid a selection of cars parked in a showroom.
Broker Notes

Up 77% in a year, guess how much more upside Macquarie tips for Eagers Automotive shares

Macquarie released its latest analysis on Eagers Automotive fast rising shares this morning.

Read more »