Stocks soar after US, China strike trade truce

Stocks soared Monday morning after the Trump administration and China announced they would temporarily slash steep tariffs on each other’s goods.

The Dow Jones Industrial Average rose more than 1,000 points after the opening bell Monday, a 2.6 percent increase. The S&P 500 index was up 3 percent and the Nasdaq composite was up 4.1 percent.

Stock futures had been climbing since Sunday morning following the announcement of a trade breakthrough by U.S. and Chinese officials. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer spent the weekend in Switzerland, where they began initial trade discussions with Chinese counterparts.

The U.S. and China poured more fuel on the market rally early Monday morning with the announcement of a temporary trade truce. 

The U.S. agreed for 90 days to bring down the tariff rate on Chinese goods from 145 percent to 30 percent — the level before Trump’s April 2 “Liberation Day” tariffs, but after his imposition of an addition 10 percent tariff in February. In response, China agreed to pause its retaliatory tariffs on U.S. goods for 90 days.

“The consensus from both delegations this weekend is neither side wants a decoupling,” Bessent said, according to The Associated Press. “And what had occurred with these very high tariff … was an embargo, the equivalent of an embargo. And neither side wants that. We do want trade.”

Trump’s tariff pause brought immediate relief to markets, which had been bracing for the blow of a de facto embargo between the world’s two largest economies. A steep decline in Chinese imports following the tariffs raised fears of empty shelves and soaring prices for other products.

But the temporary truce also raises questions about how much of Trump’s transformative trade agenda the president will be able to deliver.

When pressed last week on the slowdown in port activity, Trump argued it was good for the U.S.

“That means we lose less money,” Trump responded, “when you say it slowed down, that’s a good thing, not a bad thing.”