Alibaba surged 7% on Thursday after it made one of its AI models public, signaling how the party isn't over for Chinese tech stocks.

The Chinese tech giant unveiled its latest AI reasoning model on Thursday, saying it beats rivals from OpenAI and DeepSeek. The day before another company launched a “general AI agent” called Manus.

The news prompted Alibaba’s Hong Kong-listed shares to close 8% higher on the day and helped boost the Hang Seng’s China Enterprises Index. The release of Alibaba’s new AI model comes a day after the launch of the “general AI agent” Manus by another Chinese company,

German stocks rallied 1.5% as the market continues to feel reverberations from an agreement by the two parties that will form the country’s next government to loosen constitutional limits on borrowing. It’s a major turnaround in German budget policy and opens the way for new borrowing and spending over the next decade.

Anxiety returned to Wall Street with markets poised to give back much of the previous day’s gains, which were spurred by President Donald Trump’s one-month exemption for U.S. automakers on his 25% tariffs for Mexican and Canadian imports.

US stock markets have tumbled over concerns that President Donald Trump's tariffs on Canada, Mexico and China will lead to a wider trade war and hurt the economy. The S&P 500 index, which tracks 500 of the biggest companies in the US,