The U.S.-China tariff truce kicked off a $700 billion rally in Big Tech stocks on Monday, as the Nasdaq led outpaced other indexes with a 3.5% surge. But not all analysts are convinced the trade war accomplished anything beyond creating a problem that markets are now celebrating the temporary suspension of.
The new agreement, announced early Monday after weekend U.S.-China talks in Switzerland, includes a 90-day pause on new tariffs and sharp rollbacks on existing duties — moves that sent stocks skyrocketing.
Here’s what analysts are saying about the deal.
In a note released early Monday, analysts at Wedbush called the agreement a “dream scenario” for stocks, especially tech. While “supply chain and economic damage has been done,” they wrote, Wall Street is likely to “focus on normalized growth post this volatile six-week period,” with a near-term recession likely “off the table.”
They added: “This is very bullish news for the tech trade… although there is more wood to chop around chip restrictions (H20/Nvidia) and other issues in the AI trade.”
“It just seems like it’s a different story every day,” a former Morgan Stanley (MS) analyst told Quartz. “I don’t know how business leaders can really make any plans when policy changes so much from week to week or even day to day. “Hopefully the tariffs stay off. The market reaction shows how important that is.”
As The Kobeissi Letter pointed out, tariffs hit 145% barely a month ago — when the S&P 500 was 200 points lower, recession chatter was peaking, and Wall Street priced in four Federal Reserve interest rate cuts for 2025. Now tariffs are rolled back to 30%, and sentiment has flipped entirely. “Sentiment is everything,” the post concluded.
Speaking to The Wall Street Journal, ING’s (ING) Inga Fechner warned that the 90-day pause might be short-lived and could actually widen the trade deficit. Mark Williams at Capital Economics similarly noted that China hasn’t offered meaningful concessions. “It will be interesting to see whether China is willing to offer anything substantive in these talks, but I can’t see that they’ll feel under a huge amount of pressure to do so,” he told The Journal. “China has successfully called Trump’s bluff.”
Williams said that even with the new arrangement — assuming it lasts — the result will still be reduced trade between the U.S. and China.
In short, there’s a bull run now. But a real victory? That’s still far from established.
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