Stocks Rally on 90-Day U.S.-China Tariff Deal/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks surged Monday after the U.S. and China announced a 90-day truce in their tariff war. The S&P 500 jumped 2.6%, the Dow gained nearly 1,000 points, and markets reacted broadly with optimism. Analysts call it a “best-case scenario” as traders ease recession fears.
Markets Surge After U.S.–China Trade Truce – Quick Looks
- U.S. and China agree to 90-day tariff pause.
- Dow jumps 957 points, S&P 500 up 2.6%.
- Nasdaq leads with 3.6% gain; crude oil up 3%.
- U.S. tariffs cut from 145% to 30%; China drops from 125% to 10%.
- Optimism spreads across Wall Street and global markets.
- Apparel, travel, and retail stocks post major gains.
- Treasury yields rise on lowered Fed rate-cut expectations.
- Global markets climb; India and Pakistan announce ceasefire.
Stocks Rally on 90-Day U.S.-China Tariff Deal
Deep Look
NEW YORK (AP) — Wall Street roared to life Monday as investors welcomed a major breakthrough in the U.S.–China trade dispute. Stocks soared after both nations agreed to a 90-day tariff truce, temporarily ending a conflict that had rattled markets and threatened to stall global growth.
The Dow Jones Industrial Average surged 957 points, or 2.3%, by early morning, while the S&P 500 jumped 2.6%, rebounding to within 5.5% of its all-time high from February. The Nasdaq composite led the gains, rising 3.6% on strong performances in technology and retail.
The catalyst: a weekend agreement between the U.S. and China to pause tariffs for 90 days, giving both sides time to solidify a longer-term deal. The joint announcement came after high-level talks in Geneva, which U.S. officials described as showing “substantial progress.”
Markets reacted swiftly across the board. Crude oil prices spiked more than 3%, Treasury yields climbed, and the U.S. dollar strengthened against major global currencies. Analysts hailed the truce as the “best-case scenario,” helping to reduce fears of a trade-driven recession.
“Tariff pressure had been the single biggest overhang for investors,” said one Wall Street strategist. “A 90-day window buys time for more progress and reassures the market.”
Tariff Reductions Announced
According to the joint statement, the United States will lower tariffs on Chinese goods from a peak of 145% to 30%, while China will cut its tariffs from 125% to 10%. The reprieve follows a similar deal struck last week between the U.S. and U.K., easing tariffs on many British imports.
The agreement is temporary but marks the most significant progress since tensions escalated last year. Though structural trade issues remain, the move signals willingness on both sides to avoid further economic fallout.
Who Benefited Most?
Retailers and manufacturers, especially those reliant on Chinese production, led Monday’s rally:
- Lululemon soared 10%
- Nike jumped 7.3%
- Best Buy and Amazon each gained more than 7%
- Carnival rose 8.9%
- Norwegian Cruise Line advanced 8%
The market reaction extended far beyond the U.S.
Global Markets Join the Rally
- European and Asian markets posted gains, though more modest than Wall Street.
- India’s Sensex surged 3.7% after India and Pakistan agreed to a truce following weeks of military escalation.
- Pakistan’s KSE 100 jumped over 9%, triggering a one-hour trading halt. The rally followed the ceasefire announcement and a $1 billion disbursement from the International Monetary Fund to support Pakistan’s economy.
Bond Market Responds
The 10-year U.S. Treasury yield climbed to 4.45% from 4.37% on Friday, reflecting stronger economic sentiment. The two-year yield, which closely tracks Fed policy expectations, jumped to 3.99% from 3.88%, as investors dialed back expectations for deep rate cuts this year.
According to data from CME Group, many traders now expect only two rate cuts from the Federal Reserve in 2025, a sharp decline from previous forecasts.
What’s Next?
Though markets celebrated Monday, the agreement is not permanent. The 90-day window merely delays further tariff escalations and opens the door for continued negotiation. If talks falter, markets could quickly reverse course.
But for now, Wall Street is breathing easier — and investors are hoping the temporary calm becomes a more lasting peace.
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