US markets have opened down after digesting the implications of Donald Trump’s 90-day pause on his sweeping tariffs.

The Nasdaq opened down 2.7 per cent, while the Dow Jones fell 1.9 per cent and the S&P 500 opened 2.3 per cent down.

Meanwhile, US Treasury yields have remained elevated, with the 30-year US Treasury sitting at 4.76 per cent, down from its five per cent peak but still above the 4.3 per cent it started the week at.

The drop in markets came despite a lower than expected inflation figures from the US today, which increased the chances that the Federal Reserve will cut interest rates and stimulate the economy

Prices increased 0.1 per cent in March, compared to market forecasts of 0.3 per cent, leading the chances of a cut from the Fed over its next two meetings to rise from 73 per cent to 82 per cent, according to data from CME Group.

Despite a temporary pause on the roll-out of Trump’s ‘retaliatory tariffs’ to the rest of the world, “the genie is still out of the bottle on policy unpredictability,” said Deutsche Bank analyst Peter Sidorov.

“A 10 per cent minimum universal tariff represents the largest tariff increase in decades and heightened trade uncertainty is likely to linger, with limited visibility on what kind of deals the US would find acceptable,” he added.

“Perhaps most crucially, we are currently still on course for a disorderly economic decoupling between the world’s two largest economies, with no immediate signs of either US or China backing down.”

In the UK, the FTSE 100 has dropped more than two per cent since the early morning, but is still up 3.9 per cent from open.

As a knock on effect from the spiking US Treasury yields, gilt yields are also elevated, with 30-year gilt yields at 5.4 per cent, down from a peak of 5.6 per cent but below the five per cent it began the week at.