Australian shares have rebounded after a bloody start to the week, but a wild overnight session on Wall Street indicates volatility could be here to stay.
The S&P/ASX200 was up 37.6 points, or 0.51 per cent in early trading, to 7380.9, as the broader All Ordinaries lifted 56.8 points, or 0.75 per cent, to 7581.
The rebound on Tuesday came after two indexes plummeted more than 4.1 per cent each on Monday, erasing $109 billion from the top 500 stocks.
Wall Street closed mostly lower overnight with the S&P500 giving away 0.23 per cent after a short-lived, 3 per cent rally on false news of a delay of United States tariff implementation.
"Contrasting tariff messages caused wild swings in equity markets overnight, with European indexes sharply lower," ANZ analysts wrote in a research note.
"The market briefly thought there would be a 90-day pause on tariff implementation, but this was denied," the note said.
Overnight, US President Donald Trump threatened to impose an additional 50 per cent tariff on Chinese goods unless China retracts its 34 per cent retaliatory tariff on US goods.
Trump also said he was not considering a pause on tariffs to allow for negotiations with trading partners, but he said he would talk to China, Japan and other countries about the duties.
Asked during a White House press availability with Israeli Prime Minister Benjamin Netanyahu if he was open to pausing tariffs, Trump said: "Well, we're not looking at that. We have many, many countries that are coming to negotiate deals with us and they're going to be fair deals. And in certain cases, they're going to be paying substantial tariffs. There'll be fair deals."
The market response was mixed after Trump invited trade partners to negotiate, increasing the likelihood that the tariffs have room to move.
Six of 11 local sectors were trading higher by 11am AEST, with real estate leading losses, down 0.34 per cent.
IT stocks led the gains, up 2.4 per cent, followed by consumer discretionary stocks, which were up 2 per cent.
Monday's heavy losses in energy stocks and materials had narrowed slightly, up 2 per cent and 1.5 per cent.
Financials were trading slightly lower, down 0.4 per cent after tanking 4.8 per cent on Monday.
The Australian dollar, which has plummeted more than 5 per cent since, is holding above 60 US cents after consolidating below the psychological level for most of the night.
The Australian dollar is buying 60.06 US cents, down from 60.14 US cents on Monday at 5pm.
Recession fears
Financial markets across the globe posted a third day of losses as investors worried that steep trade barriers around the world's largest consumer market could lead to a recession.
Asian and European shares also plunged as investors feared the duties Trump has likened to "medicine" could lead to higher prices, weaker demand and potentially a global recession.
Goldman Sachs raised the odds of a US recession to 45 per cent.
Ongoing uncertainty in markets would likely cause volatility for some time to come, Moomoo market strategist Jessica Amir said.
"Investors that are not into riding roller coasters should sit back until May or June, which is how long US treasury secretary Scott Bessent said tariff negotiations could take.
"While they are sitting on a big cash pile, investors need to see certainty before they'll 'buy the dip'."
- With input from Australian Associated Press
