US equities rallied sharply on Monday after the US and China reached a temporary tariff reduction agreement during weekend talks in Switzerland.
The Dow Jones Industrial Average surged 1,021 points, or 2.5%, while the S&P 500 climbed 2.9% and the Nasdaq Composite jumped 4%.
The breakthrough followed high-level discussions led by Treasury Secretary Scott Bessent and the US.
Trade Representative Jamieson Greer, who met Chinese Vice Premier He Lifeng in Geneva.
Under the deal, both countries will cut reciprocal tariffs by 115% for 90 days, bringing US duties on Chinese goods down to 30% and Chinese tariffs on American imports to 10%.
Bessent described the talks as “very productive” and indicated that further negotiations are expected in the coming weeks.
The announcement helped fuel a broad rally across sectors, particularly among companies with heavy exposure to international trade.
Best Buy gained 8.7%, Dell Technologies rose 7.8%, and On Semiconductor surged 10%.
Amazon and Apple added more than 8% and 5%, respectively, while the iShares Semiconductor ETF (SOXX) jumped over 6%.
The relief rally comes after a sharp escalation in trade tensions last month when President Donald Trump imposed a 145% tariff on Chinese goods, prompting a 125% retaliatory tariff from Beijing.
“We believe peak uncertainty over trade has passed, but market volatility is likely to stay,” UBS head of fixed income Kurt Reiman noted in a client memo. He expects the effective US tariff rate outside China to decline toward 15% by year-end.
The S&P 500 had come close to bear market territory last week before rebounding on the back of the global tariff rollback and renewed investor optimism over a potential longer-term resolution.
US-China trade deal lifts sentiments across the globe
Global equities rallied Monday after the US and China announced a 90-day tariff truce, easing tensions between the world’s two largest economies.
Under the agreement, reciprocal tariffs will fall from over 100% to 10%, though the US will retain a 20% tariff on fentanyl-related imports from China.
This leaves the average US duty on Chinese goods at 30% during the pause.
European and Asian markets surged on the news. The Stoxx 600 index rose 1%, Germany’s DAX hit a one-year high, and Hong Kong-listed stocks climbed nearly 3%.
The deal also spurred gains in US assets. The dollar index rose 1%, while the 10-year Treasury yield added 6 basis points amid rising expectations for renewed economic activity.
Strategists welcomed the scale of the tariff cuts but cautioned about the durability of the truce.
“The magnitude of this tariff reduction is larger than expected,” said Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management.
However, he warned that reaching a comprehensive trade deal in three months remains unlikely.
Mizuho Bank’s Jordan Rochester called the Geneva agreement “much better news than expected,” predicting it would blunt the “Sell America” narrative that had taken hold in recent weeks following Trump’s aggressive tariff posture.
The post US stocks open in the green after US-China deal: Nasdaq jumps 4%, S&P up 3% appeared first on Invezz
