European stocks mostly opened lower, with US futures falling over 1% on Thursday, despite most Asian markets closing the day with gains.

The selling pressure was triggered following Wall Street's rally, which was driven by President Donald Trump's decision to grant a one-month exemption for US automakers from his 25% tariffs on Mexican and Canadian imports. This sparked hopes that he may avoid a severe trade war that could damage economies and drive inflation up. Germany's DAX rose 0.5% to 23,194.03 while Paris' CAC 40 fell 0.5% to 8,135.30.

Britain's FTSE 100 plunged 1% to 8,670.99. The future for the S&P 500 was down 1.2%, and that for the Dow Jones Industrial Average was 1% lower. In Asia, Tokyo's Nikkei 225 index climbed 0.8% to 37,704.93. Shares of Japanese automakers surged in U.S. trading, although Toyota Motor Corp.'s shares dropped back in Tokyo trading, losing 1%.

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Honda Motor Corp. gained 2% and Nissan Motor Co. increased 1.1%. Hong Kong's Hang Seng index soared 3.3% to 24,369.71 after Chinese government reports to the annual legislative session showed Beijing's stronger determination to boost consumer spending and other domestic demand.

The Shanghai Composite index rose 1.2% to 3,381.10. South Korea's Kospi jumped 0.7% to 2,576.16, while Australia's S&P/ASX 200 slipped 0.6% to 8,094.70. Taiwan's Taiex lost 0.7%, while Bangkok's SET plummeted 1.4%. On Wednesday, gains for Ford Motor and GM stocks helped push Wall Street higher.

The S&P 500 saw a rise of 1.1%, while the Dow increased by 1.3%. The Nasdaq composite also experienced an uptick, advancing by 1.6%. Trump announced that he would be granting a one-month exemption for US automakers on his 25% tariffs for Mexican and Canadian imports after discussions with Ford, General Motors and Stellantis, the owner of Chrysler. This news brought relief to Wall Street, causing stocks for both Ford and General Motors to surge over 5%, contributing to a broad market rally.

However, Trump did not retract all the tariffs he had imposed on the United States' largest trading partners, including . In a speech before Congress on Tuesday night, he confirmed plans to proceed with additional tariffs set to take effect on April 2.

This announcement has added to the uncertainty in markets already shaken by his statement on Monday that there was no more room for negotiations. The higher tariffs took effect on Tuesday, leading to a slump in the US stock market.

Regardless of the final outcome, the mere threat of tariffs has impacted U.S. households and businesses, with consumer confidence taking a significant hit due to fears of inflation. Amidst these changes from Washington, US. manufacturers report that their growth is nearing a standstill due to concerns about tariffs.

A recent series of weaker-than-expected reports on the U.S. economy has raised the spectre of a worst-case scenario known as "stagflation." This rare occurrence, characterised by a stagnant economy coupled with high inflation, is now a growing concern.

The US economy concluded the previous year on a robust note. If it experiences a downturn, the Fed has the option to reduce its primary interest rate to facilitate borrowing and stimulate growth. However, such rate cuts could fuel inflation. The situation could become tricky if tariffs cause a surge in prices for everyday items like eggs.

In other early Thursday market activity, US benchmark crude oil saw a slight increase of 2 cents, reaching $66.33 per barrel. Brent crude, the international standard, also rose by 2 cents, standing at $69.32 per barrel.

Currency-wise, the US dollar depreciated against the Japanese yen, dropping from 148.89 yen to 147.90 yen. The euro also experienced a minor fall, moving from $1.0790 to $1.0789.