U.S. equity markets surged Monday after Washington and Beijing announced a sweeping 90-day pause on their escalating trade war, dramatically reducing tariffs on hundreds of billions in goods.
The agreement, unveiled after two days of talks in Geneva, triggered a sharp rally across all three major indexes.
The Dow Jones Industrial Average jumped more than 1,000 points, up 2.5%. The S&P 500 soared 2.66%, while the tech-heavy Nasdaq Composite led the charge with a 3.62% gain. The market response reflects broad investor relief at what many feared was becoming a prolonged economic cold war between the world’s two largest economies.
The deal, which slashes U.S. tariffs on Chinese imports from 145% to 30%, and lowers China’s retaliatory duties on American goods from 125% to 10%, was described by Treasury Secretary Scott Bessent as “substantial progress.” It marks the first face-to-face meeting since the tariff standoff intensified in early spring.
The Dow Jones Industrial Average jumped more than 1,000 points, up 2.5%. The S&P 500 soared 2.66%, while the tech-heavy Nasdaq Composite led the charge with a 3.62% gain. The market response reflects broad investor relief at what many feared was becoming a prolonged economic cold war between the world’s two largest economies.
The deal, which slashes U.S. tariffs on Chinese imports from 145% to 30%, and lowers China’s retaliatory duties on American goods from 125% to 10%, was described by Treasury Secretary Scott Bessent as “substantial progress.” It marks the first face-to-face meeting since the tariff standoff intensified in early spring.
Tech Stocks Lead the Rally
Big Tech megacaps, long battered by trade tensions, rebounded sharply. Amazon (AMZN) and Tesla (TSLA) soared over 7%. Apple (AAPL), Meta (META), Alphabet (GOOG), and Nvidia (NVDA) all notched strong gains as investor confidence returned to the battered sector.
Wedbush’s Dan Ives called the truce “very bullish” for tech, highlighting reduced supply chain risk for giants like Apple and Tesla, both of which rely heavily on Chinese manufacturing and sourcing. According to analysts, about 90% of iPhones are produced in China, and Chinese firms represent up to 40% of Nvidia’s customer base.
Meanwhile, advertising revenue from Chinese sellers—responsible for a significant slice of ad spend across platforms like Amazon, Meta, and Google—also stands to benefit from eased tensions.
Broader Market Impacts and Next Steps
Beyond equities, markets reacted broadly. The U.S. dollar and Treasury yields climbed, while gold dropped more than 3% as investors moved away from safe-haven assets. Oil prices also surged amid hopes for a pickup in global trade activity.
The pause provides temporary relief for businesses paralyzed by tariff uncertainty. Many had delayed investment decisions pending clearer trade policy. Monday’s deal may act as a catalyst for renewed capital spending, especially following a recent U.K. trade framework that also signaled a shift toward stabilization.
Still, the agreement is not final. Both nations are expected to continue negotiations in alternating rounds between Beijing and Washington. President Trump hinted at a possible phone call with President Xi Jinping later this week, and officials left the door open for extending the pause beyond the 90-day window.
The truce comes amid broader diplomatic recalibrations. China agreed to eliminate non-monetary barriers and address contentious issues like fentanyl exports, which U.S. officials called a “surprising bright spot” in the talks.
Outlook: Relief Rally or Short-Term Bounce?
Despite Monday’s euphoria, some analysts urged caution. BTIG’s Jonathan Krinsky noted that similar strong openings above key technical levels have often reversed in the short term, stating, “The market often buys the mystery and sells the history.”
With key inflation data and major earnings from companies like Walmart (WMT), Sony, and Alibaba (BABA) still to come this week, the sustainability of the rally will depend on how investors digest these next signals.
For now, however, Wall Street appears to be breathing a collective sigh of relief—at least for the next 90 days.
Considering a $1,000 investment in these companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and unearth the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or our Trading Room. Take advantage of our special offer today, starting at just $1 in the first month.
Unlock the secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
And if you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading course and technical trading course, where you can learn trading, analyze stocks, delve into chart patterns for stocks, and gain invaluable insights for making the best company investments.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up-to-date with regular market updates. Learn trading, basics of investing, and how to pick the best stocks to buy. Whether you're a beginner or seasoned investor and trader, we've got you covered. Get started for free, today!