Europe stocks close 3.7% higher for best session in three years as U.S. sell-off resumes

European stock markets closed sharply higher on Thursday, with the Stoxx 600 index provisionally up 3.93% for its best session gain since March 2022.

Germany's DAX index led gains, up 4.67%. The country is expected to be one of the hardest-hit by new U.S. duties among major European economies due to the size of its exports to the country.

France's CAC 40 rose 3.8% Thursday, while the U.K.'s FTSE 100 was up 3.04%.

— Jenni Reid

U.S. stocks kicked off Thursday's session in the red.

The S&P 500 fell 2.1%, The Dow Jones Industrial Average slipped 666 points, or 1.6%. The Nasdaq Composite declined 2.8%.

— Hakyung Kim

Prada on Thursday announced it reached a definitive agreement to buy fellow Italian fashion house Versace for 1.25 billion euros ($1.39 billion), based on the firm's enterprise value.

Hong Kong-listed Prada will acquire 100% of Versace from New York-listed multinational holding company Capri Holdings.

"We are delighted to welcome Versace to the Prada Group and to build a new chapter for a brand with which we share a strong commitment to creativity, craftmanship and heritage," Prada Group Chairman Patrizio Bertelli said in a statement.

European luxury firms have been rocked by U.S. tariff turbulence this year, with Prada shares down around 20% in the year-to-date and Capri Holdings down 22%.

— Jenni Reid

U.S. consumer price inflation eased more than expected in March as President Donald Trump prepared to launch tariffs against U.S. trading partners, the Bureau of Labor Statistics reported Thursday.

The consumer price index, a broad measure of goods and services costs across the U.S. economy, fell 0.1% in March, putting the 12-month inflation rate at 2.4%.

Read more here.

— Jeff Cox

Shares of companies involved in semiconductor manufacturing jumped during morning trade on Thursday.

At 10:20 a.m. London time, Infineon was up 10.9%, BE Semiconductor was 10.7% higher ASMI gained 10%. ASML was up 6.4%.

Chips were exempt from the reciprocal tariffs that U.S. President Donald Trump paused on Wednesday, but he said last week that duties would be imposed on them "very soon."

— Chloe Taylor

In a note on Wednesday, analysts at investment bank Citi said they had adjusted their portfolio allocations in the wake of U.S. President Donald Trump pausing country-specific tariffs.

They said they were buying the European stocks and reengaging with their long gold strategy.

"We like the … large tariff reduction on Europe and trading partners," they said, arguing that Eurostoxx had been oversold before Trump's temporary tariffs reversal.

On gold, Citi's analysts said they took a profit last week.

"We are structurally bullish and choose to re-enter here," they said.

— Chloe Taylor

Shares of Danish shipping giant Maersk, a bellwether for global trade, posted substantial gains on Thursday morning, rallying after U.S. President Donald Trump's 90-day pause on higher tariffs for some countries.

Shares of Maersk rose by 12% shortly after the opening bell, soaring toward the top of the pan-European Stoxx 600.

The company has previously warned that Trump's tariffs on Mexico, Canada and China were "clearly" going to be inflationary over the short term.

Read more here.

— Sam Meredith

Bridgewater founder Ray Dalio said Wednesday evening that U.S. President Donald Trump's temporary pullback on country specific tariffs was a "great time for all involved to reconsider their approaches," urging the administration to extend the tariff rollback to China.

"There are better and worse ways of handling our problems with unsustainable debt and imbalances, and President Trump's decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way," he in a post on X, formerly Twitter, after Trump announced a 90-day pause on country-specific tariffs.

The White House's temporary reversal on the policy exempted China, which will still be subject to net total tariffs of 104%. In his post on Wednesday, Dalio urged the president to reconsider this position.

"I hope and expect that he will do the same with the Chinese, which I believe includes negotiating a deal that appreciates the RMB against the dollar, achieved by the Chinese selling dollar assets while also easing their fiscal and monetary policies to stimulate their demand," he said. "This would be a win-win."

— Chloe Taylor

European shares saw a huge rally at the open on Thursday, with the regional Stoxx 600 index jumping 7% by 8:23 a.m. in London.

Germany's DAX was 7.5% higher, while banking stocks, up more than 10%, led sectoral gains.  

 — Chloe Taylor

In a note to clients on Wednesday evening, Deutsche Bank Research's George Saravelos noted that U.S. President Donald Trump had mentioned the bond market during his press conference at the White House that day.

"The administration is finally signalling responsiveness to the very extreme market conditions we highlighted in the morning. At the margin, this should reduce the probability that such an extreme policy mix returns," Saravelos said.

Stocks on Wall Street surged on Wednesday after Trump announced a 90-day pause on country-specific tariffs, with the exception of new duties on China.

Despite the market response, Saravelos warned that "the damage has been done" by Trump's reciprocal tariffs policy.

"Even if the tariffs are permanently suspended, damage has been done to the economy via a permanent sense of unpredictability in policy," Saravelos explained. "The events of the last few weeks will resonate amongst global economic partners during the upcoming negotiations on trade and indeed for many years to come. The desire to build greater strategic independence from the US across all fronts will be here to stay."

— Chloe Taylor

European stocks look set to rise sharply when trading begins Thursday.

According to IG data, the U.K.'s FTSE 100 was set to add 414 points to 8,071, the German DAX was on track to jump 1,547 points to 21,231, and France's CAC 40 was set to rise 543 points to 7,418. The Italian FTSE MIB meanwhile was set to soar 3,031 points to 34,911.

— Sophie Kiderlin

Japan's Nikkei 225 share average rallied significantly on Thursday, leading gains in Asia-Pacific.

The benchmark surged 8.83% as at 9.25 a.m. local time to 34,508.62, crossing the 34,000 threshold after six days.

The best-performing stocks in the index include NTN Corp which surged 9.39%, Suzuki Motor which gained 9.17% Denso Corp which rose 8.72%, according to LSEG data.

The broader Topix index gained 7.52%.

The rise was led by Japan Display Inc which rose 14.29%, Hamamatsu Photonics which climbed 12.79% and Rohm Co which added 12.04%.

— Amala Balakrishner

Jim Cramer said the market's dramatic turnaround is exactly why investors need to stay in the market even when uncertainty and volatility are high. "If you want to help people make money, tell them to stay in the game when there's total despair," said Cramer, who had urged investors to "stay the course" throughout the four-day market skid.

— Kevin Stankiewicz

Wednesday's stunning stock market rally is going into the history books.

The S&P 500's 9.52% one-day gain ranks as the third-biggest since World War II for the main stock market benchmark, according to FactSet.

For the 30-stock Dow Jones Industrial Average, it surged nearly 3,000 points, or 7.87%, scoring its biggest advance since March 2020. The 12.16% surge for the tech-heavy Nasdaq Composite marked its second-best day ever. 

— Yun Li

Commerce Secretary Howard Lutnick said on "Fast Money" that the selling in financial markets over the past week was "absolutely not" a factor in the tariff pause on Wednesday. Earlier in the day, before President Trump announced the change, the S&P 500 had fallen to just above its bear market threshold, while the 10-year Treasury yield briefly traded above 4.5%.

CNBC's Melissa Lee also asked Lutnick if U.S. companies could be confident in the direction of policy going forward. The Commerce chief responded that firms should carefully consider their exposure abroad and predicted upcoming announcements of companies building products in the U.S.

"I think it's important for companies to understand that the countries they do their business in matter. If you do business in China, or you do business with a country that basically is just a proxy China, then you're going to have to deal with the fact that President Trump does not think we are being treated correctly," Lutnick said.

— Jesse Pound