After three days of decline, the London Stock Exchange has begun to recover. In early trading, the FTSE 100 index rose 95 points, or 1.2%, to 7,799.
The biggest gainer was airline IAG, up 4.9%, followed by the technology investment company Scottish Mortgage Investment Trust (+4%), mining, oil companies, and banks.
Other European markets also saw gains. France's CAC rose 1.8%, Germany's DAX 1.3%.
This comes after gains in some Asia-Pacific markets, with Japan's Nikkei up 6%.
The recovery comes despite China's Commerce Ministry vowing to "fight to the bitter end" against U.S. tariffs. Donald Trump has threatened to impose an additional 50% tariff if China does not lift its tariffs.
Deutsche Bank's market strategist Jim Reed said optimism about a U.S.-Japan tariff deal boosted markets. He told clients: "The market decline has begun to stabilize after the unexpected declines of recent days. For example, the S&P 500 fell just 0.23% yesterday, and this morning futures rose 1.32%, becoming the first positive day since the announcement of reciprocal tariffs."
