Dow surges more than 1,000 points after China and the U.S. agree to temporary tariff cuts

Following President Trump’s announcement of the U.S.-China trade agreement on Monday, U.S. stocks surged, closing near session highs as markets welcomed the temporary suspension of reciprocal tariffs. The joint statement from both nations eased fears of a prolonged trade war, fueling a global market rally. Early trading saw the S&P 500 gain 2.6%, placing it within 5.5% of its peak in February. The Dow Jones Industrial Average soared more than 1,100 points, gaining 2.8%, while the tech-heavy Nasdaq Composite led the charge, skyrocketing 4.3% on renewed investor optimism and easing geopolitical tensions.

Following the U.S. and China’s agreement to halt tariffs for 90 days, Wall Street saw a remarkable performance, with investor sentiment being bolstered by the unexpected magnitude of tariff reductions. The U.S. slashed duties on most Chinese imports from 145% to 30%, while China cut its 125% tariffs on U.S. goods to 10%. 

This relief reignited interest in Big Tech megacaps previously hit by trade tensions. U.S. stock futures surged over 400 points in response to the positive news. AI chip giant Nvidia (NVDA) surged over 5%, while Amazon (AMZN), Apple (AAPL), and Tesla (TSLA) also rallied. The U.S. dollar (DX=F) and Treasury yields (^TNX) climbed, and oil prices (CL=F, BZ=F) led a broad commodity rally.

Traders are eagerly awaiting key inflation data this week to gauge the initial inflationary impact of President Trump’s tariffs. 

Optimism has grown following high-level trade talks in Switzerland, with both sides signaling progress. U.S. Treasury Secretary Scott Bessent called the discussions “highly productive,” while China’s Vice Premier He Lifeng said an “important consensus” was reached. A joint statement is expected shortly, with both nations pledging further developments aimed at easing trade tensions and potentially reducing the longstanding U.S. trade deficit with China.