Commonwealth Bank of Australia (CBA.AU) saw its stock soar by 5.40% during Thursday's trading session, as investors reacted positively to U.S. President Donald Trump's decision to pause some reciprocal tariffs. The bank's shares experienced a significant uptick, reflecting broader gains in the Australian financial sector.

The rally was triggered by President Trump's announcement of a 90-day pause on certain reciprocal tariffs, which has helped alleviate concerns about the potential economic impact of U.S. trade policies. This move has boosted investor confidence, particularly in the banking sector, which is often sensitive to macroeconomic developments and trade relations.

Commonwealth Bank's surge was part of a larger trend in the Australian financial market. The financial sub-index rose as much as 6.4%, marking its biggest intraday percentage gain since May 2020. Other major Australian banks also saw substantial increases, with National Australia Bank up 6%, ANZ Group climbing 4.8%, and Westpac gaining 5.5%. This collective rise in bank stocks has helped to trim the financial sub-index's year-to-date losses to 4.2%, signaling a potential turnaround in the sector's performance.