Markets Soar as U.S.-China Tariff Truce Sparks Investor Optimism

Stock Markets Surge on Tariff Relief

Markets opened with strong gains Monday after the U.S. and China announced a temporary agreement to ease tariffs, calming fears of a prolonged trade war. The S&P 500 jumped 2.7%, gaining 153 points to 5,812, while the Dow Jones rose 2.5%, up 1,011 points to 42,261. The Nasdaq Composite led the surge, climbing 3.4% thanks to renewed investor confidence in tech giants heavily exposed to Chinese supply chains.

Apple shares rose 5.9% and Nvidia climbed 3.3%, reflecting relief from the threat of steep Chinese tariffs that had weighed heavily on the tech sector.

Details of the U.S.-China Agreement

The White House and Chinese officials jointly announced a 90-day tariff rollback, effective May 14. U.S. tariffs on Chinese imports will drop from a peak of 145% to 30%, while China’s tariffs on American goods will fall from 125% to 10%. A 10% baseline tariff introduced by President Trump on most imports—referred to as “Liberation Day” tariffs—will remain in effect.

The deal was brokered in Switzerland over the weekend, where Treasury Secretary Scott Bessent and U.S. Trade Administrator Jamieson Greer met with Chinese delegates.

UBS Global Wealth Management estimates that if negotiations continue positively, U.S. tariffs could eventually settle between 30% and 40%.

Market Reaction and Analyst Outlook

Alongside equities, the U.S. dollar rose against other major currencies, crude oil prices jumped over 3%, and the 10-year Treasury Yield climbed to 4.4%, the highest since April 11.

Despite the euphoria, analysts urged caution. “Expect volatility as we approach the 90-day reciprocal tariffs deadline,” warned Gina Bolvin of Bolvin Wealth Management Group, noting the rally could be short-lived without a lasting deal.

Still, the breakthrough has created optimism. Chris Zaccarelli of Northlight Asset Management said the market now believes that new record highs are possible by yearend, especially with recent deals with the U.K. and China showing diplomatic progress.

Winners Across Tech, Retail, and Travel

The tariff reprieve especially boosted companies with significant ties to Chinese manufacturing:

• Amazon jumped over 7%, as more than 70% of its inventory is China-sourced.

• Lululemon surged 10%, and Nike gained 7.3%, with apparel brands breathing a sigh of relief over lower import costs.

• The travel industry soared with Delta and American Airlines up over 6%, and Carnival and Norwegian Cruise Line stocks gaining 8.9% and 8%, respectively.

Monday’s rally gave Wall Street a much-needed boost, with the S&P 500 surpassing its pre-tariff announcement level from April 2—a sign that investor sentiment is swinging back toward optimism as trade tensions thaw.

Photo: AFP via Getty Images

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