Stock markets jumped sharply Monday following major news on trade relations between the United States and China. The US-China tariff deal brought immediate optimism to Wall Street, lifting futures and boosting investor confidence.
S&P 500 futures surged 2.8% in early trading. Meanwhile, Dow Jones futures jumped over 900 points, or 2.2%. The tech-heavy Nasdaq 100 futures led gains, rocketing by 3.6%. These sharp movements came after a joint announcement from the US and China.
Both nations agreed to reduce most of their tariffs for the next 90 days. This truce allows time for deeper trade discussions. The US-China tariff deal paused tit-for-tat measures that had strained economic ties for years. It also signaled a possible shift in global trade dynamics.
Treasury Secretary Scott Bessent confirmed the breakthrough during a Monday morning press briefing. He explained that US tariffs on Chinese imports would drop to 30%, down from 145%. China, in return, would reduce its retaliatory tariffs to 10%, down from 125%.
Markets had been under pressure due to escalating trade tensions and inflation concerns. Last week, all three major indexes posted losses. The Dow broke a two-week winning streak, and volatility returned to Wall Street. However, the US-China tariff deal quickly reversed that mood.
Commerce Secretary Howard Lutnick stressed that the US still plans to enforce a 10% baseline tariff. He made it clear that further talks with other countries remain ongoing. Even with this aggressive stance, the temporary truce brings relief to many investors.
Now, traders are focusing on key economic reports. April’s Consumer Price Index arrives Tuesday, offering insight into inflation trends. Later in the week, retail sales and the Producer Price Index will follow.
Earnings reports are also drawing attention. Fox Corporation, Monday.com, and Chegg release results Monday. Sony, Alibaba, and Walmart are scheduled later in the week.
Clearly, the US-China tariff deal has reenergized investor sentiment. Whether the momentum holds will depend on economic data and progress in upcoming trade talks.
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