Markets caught a break this week. After Trump walked back his tariff threats against European allies, equities surged—and it wasn't a one-off event. Investors rushed back into stocks for the second consecutive session, signaling renewed risk appetite across broader financial markets.

The policy reversal sent a clear signal: trade tensions, at least temporarily, are cooling. This matters more than you might think. When uncertainty around tariffs diminishes, investors tend to rotate out of defensive plays and into growth-oriented positions. That behavioral shift ripples through everything—from equities to alternative asset classes.

For anyone tracking macro trends, this is a textbook example of how geopolitical posturing drives market psychology. A single announcement reshapes investor positioning almost instantly. It's a reminder that policy shifts, even reversals, can create meaningful momentum swings. Whether this momentum sustains depends on follow-through—but for now, risk-on sentiment is back in the driver's seat.