U.S. stock futures rallied on Monday morning after the U.S. and China agreed to slash tariffs by 115%, following two days of intensive talks in Switzerland. This major trade deal boosted investor confidence, with futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) up 3.41%, 1.91%, and 2.5%, respectively, at 4:37 a.m. EST, May 12.
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Importantly, the U.S. has agreed to reduce duties on Chinese imports to 30% from 145%, and will China lower its levies to 10% from 125% on U.S. goods. According to the terms, the U.S. and China have agreed to lower tariffs for 90 days while continuing trade negotiations.
Importantly, President Donald Trump said the discussions mark a “total reset” in trade relations in a constructive and friendly way. This positive remark boosted investor sentiment, easing concerns about trade uncertainties.
The U.S.-China trade tensions escalated last month as tariffs surged to 145% on Chinese imports and 125% on U.S. goods. Markets have responded positively, with the S&P 500 recovering losses from the tariff spike, but it remains 8% below its February peak.
Investors are now looking forward to key U.S. economic data releases this week. On Tuesday, the Consumer Inflation figures will be released. Further, the Retail Sales and Producer Price Index data points will be public on Thursday. These reports will help assess the overall health of the U.S. economy.
On the earnings front, several companies are set to release reports this week, such as Rigetti Computing (RGTI), Archer Aviation (ACHR), Cisco (CSCO), Alibaba (BABA), Walmart (WMT), Virgin Galactic (SPCE), Deere (DE), and Quantum Computing (QUBT), among others.
Meanwhile, the U.S. 10-year treasury yield was up, floating near 4.453%. Simultaneously, WTI crude oil futures are trending higher, hovering near $62.71 per barrel as of the last check.
At the same time, the Gold Spot U.S. Dollar Price declined to $3,220 per ounce on Monday. Optimism about a U.S.-China trade resolution has shifted global sentiment, leading to a dip in gold prices.
Elsewhere, European indices opened higher today on news that the U.S. and China have agreed to cut tariffs, easing trade tensions.
Asia-Pacific Markets Ended Higher Today
Asia-Pacific indices were green today as investors welcomed the U.S.-China trade deal, which includes a 90-day tariff pause and a 115% tariff cut.
At the same time, the Hong Kong index was up 2.98%. Further, Japan’s Topix and Nikkei indices gained 0.31% and 0.38%, respectively. Also, China’s Shenzhen Component and Shanghai Composite indices closed higher by 1.72% and 0.82%, respectively.
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