The Dow Jones Industrial Average soared more than 1,000 points, while the S&P 500 and Nasdaq opened higher amid a massive market reaction to news of a trade deal between the United States and China.
Global stocks, having fluctuated heavily in the wake of the tariffs uncertainty, rose as the latest sentiment buoyed buyers.
Dow opened more than 1,000 points up as investor reaction to the U.S.-China deal cascaded across the market.
The S&P 500 soared 2.8% and tech-heavy Nasdaq pumped 4%. Asian and European stock markets also edged higher, with jitters fading following a weekend of highly anticipated talks between trade officials from the U.S. and China.
White House released a statement regarding a deal and U.S. Treasury Scott Bessent commented further in a CNBC interview on Monday. The news is that the global trade giants have struck a deal to temporarily cut reciprocal tariffs.
Specifically, the U.S. will slash tariffs on most Chinese imports from a high of 145% to 30%. Meanwhile, China will lower its duties on U.S. goods from 125% to 10%.
“We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%,” U.S. Treasury Secretary Scott Bessent said at a news conference.
The agreement suggests Wall Street could extend the gains seen last week when President Donald Trump announced a trade deal between the U.S. and the United Kingdom.
In addition to equities, the broad market opened higher on Monday. The U.S. dollar climbed, alongside oil prices and Treasury yields. Bitcoin (BTC) also rallied, climbing above $105,000. Notably, gold dropped 3.2% to around $3,236 per ounce.
Tariff jitters fading will likely catalyze further gains. But traders will also be keen on new inflation data with the Consumer Price Index set for release on Tuesday. U.S. retail sales and the Producer Price Index on Thursday, May 15.
In earnings news, investor attention will turn to reports from Walmart (WMT), Sony (SONY) and Alibaba (BABA), all scheduled to release quarterly results this week.
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