Stock markets rocketed and the dollar fell Thursday after Donald Trump paused steep tariffs on most countries, while investors appeared to brush off the US President’s decision to ramp up duties on China.

Trump’s shock decision Wednesday (Thursday in Manila) to delay most of the new tariffs by 90 days drove the European Union to put its counter-tariffs on hold, boosting European and Asian indices.

Trump’s announcement came after European stock markets had closed down by around three percent Wednesday, but in time to send Wall Street soaring.

Trump backtracked on the punishing tariffs after global equities plummeted and US Treasuries — considered the safest option in times of crisis — showed signs of cracking.

But he kept a baseline 10-percent tariff intact and ramped up his trade war with Beijing by hiking duties Chinese goods to 125 percent after facing strong retaliation.

Paris and Frankfurt cruised almost six percent higher in afternoon deals Thursday while London advanced around 4.5 percent.

In Asia, Tokyo surged nine percent.

While the tariffs pause was welcomed by investors, “the lack of long-term clarity may become more of an issue as time goes on.” said AJ Bell investment director Russ Mould.

Chinese markets also gained support Thursday from optimism that Beijing will unveil fresh stimulus measures to support its economy.

Hong Kong rose more than two percent -- a third day of gains after collapsing more than 13 percent on Monday, its worst trading day since the Asian financial crisis in 1997.

Shanghai ended up more than one percent Thursday.

“Crucially, we are currently still on course for a disorderly economic decoupling between the world’s two largest economies, with no immediate signs of either US or China backing down,” said Jim Reid, an analyst at Deutsche Bank.

US Treasury yields have edged down after a successful auction of $38 billion in notes.