Stock futures soared after the U.S. and China on Monday announced a truce in their trade war by agreeing to suspend steep tariffs for 90 days.
The U.S. reduced its levies on Chinese imports to 30% from as high as 145%, while China cut its tariffs on American goods to 10% from 125%. The deal followed a meeting in Switzerland this weekend involving U.S. Treasury Secretary Scott Bessent, U.S. Trade Administrator Jamieson Greer and Chinese negotiators.
S&P 500 futures were up 179 points, or 3.2%, as of 7:15 a.m. EST, while Dow Jones Industrial Average futures soared more than 1,000 points, or 2.5%, and Nasdaq Composite futures jumped 822 points, or 4%.
“While the lower tariffs are technically only in place for 90 days, and 30% is still quite large on an absolute basis, the news is clearly an upside positive surprise,” equities analyst Adam Crisafulli, head of Vital Knowledge, told investors in a research note.
Bessent said the temporary reductions would effectively reduce the level of U.S. tariffs still in place on Chinese goods to about 30%, while China was reducing its levies on American imports to 10%.
Global stock markets also rose on news of the U.S. and China de-escalating the trade conflict, if only temporarily. Hong Kong surged 3%, Germany’s DAX gained 1%, France’s CAC 40 in Paris added 0.8% and Britain’s FTSE 100 ticked up 0.1% higher.
Despite the signs of progress in easing tensions between the world’s two largest economies, some market analysts warned that the road ahead remains uncertain.
“This is a substantial de-escalation,” Mark Williams, chief Asia economist with Capital Economics, said in a report. “However, the U.S. still has much higher tariffs on China than on other countries and still appears to be trying to rally other countries to introduce restrictions of their own on trade with China.”
The Associated Press
contributed to this report.
Alain Sherter is a senior managing editor with CBS News. He covers business, economics, money and workplace issues for CBS MoneyWatch.
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