The European carbon market surged by almost €4 in the first hour of trading on Thursday after President Trump announced a 90 day pause on “higher reciprocal tariffs”. The announcement offers a moment of relief for the carbon market and puts an end to the sixth consecutive day of losses.

The surge mirrors the euphoria that swept over Wall Street last night with broader global markets also posting strong gains this morning. Dow Jones advanced by 7,87%, its biggest daily gain since March 2020 while S&P500 jumped by 9,52%, its biggest since 2008.

“We’re having a good day in the stock market, as you can see—an all-time, record day—and hopefully it continues,” Trump said at the White House on Wednesday. A decision hailed as a victory by the president himself, prompted analysts to recommend caution for investors.

“This victory looks like celebrating a big party when your favorite national soccer team just won against San Marino. No offence to San Marino, but you know what I mean”, writes ING’s Carsten Brzeski in an article this morning, adding that ‘the current situation is not only chaotic, it’s crazy”.

The recovery on the European carbon market this morning was fueled by optimism among traders that the worst may be over. However, merely two hours into the trading session, signs emerged that the recovery may be short-lived, as EUAs have already fallen €2 below its intraday high.

Although it’s difficult to anticipate Trump’s next move, one thing is clear amid this uncertainty: the U.S. tariff policy will continue to dominate discussions across global markets, including European energy-related markets.