The S&P 500 surged 2.9% at the open on Monday after the U.S. and China agreed to slash tariffs for 90 days, signaling a temporary de-escalation in their trade war.
The techheavy Nasdaq also jumped 4.1% following the agreement, which came after weekend negotiations in Geneva. The deal will see the U.S. reducing tariffs on Chinese goods imposed during President Trump’s second term from 145% to 30%, while China will lower retaliatory duties on U.S. imports from 125% to 10%.
The announcement boosted the U.S. dollar by 1.2% against a basket of currencies, and Brent crude oil prices rose 3.2% to $65.96 per barrel. Analysts described the tariff reductions as unexpectedly early and significant, with Chris Turner from ING highlighting the larger-than-anticipated concessions. Capital Economics estimated that, after the agreement, total U.S. tariffs on China would average around 40%, while Chinese tariffs on U.S. goods would be about 25%.
