U.S. stocks soared Monday after the world’s two largest economies reached a temporary trade deal to significantly lower tariffs while talks continue.
The Dow gained 2.8% to close at 42,410, above where it closed on April 2 before President Donald Trump’s “Liberation Day” tariffs drove markets down. The S&P 500 gained 3.26% on the day while the Nasdaq was up 4.3%, entering a new bull market by closing 20% above its April low point.
On Monday morning, China and the U.S. released details of a trade pact reached over the weekend after talks in Geneva. The U.S. and China said they will cut tariffs on imports from each other by May 14.
After the weekend meeting, the two global superpowers agreed to slash tariffs so high that nearly all trade between the two nations stopped.
The U.S. will reduce its tariffs on China from 145% to 30% while the two nations continue to talk. China will cut its levies on U.S. imports from 125% to 10%, according to a joint statement from the two nations.
The U.S. goods trade deficit with China was $295.4 billion in 2024, the largest with any trading partner, according to the White House.
