Stocks surged around the world after U.S. and Chinese officials said they agreed to temporarily suspend most of the tariffs they have imposed on each other.
Futures for the S&P 500 suggested that U.S. stocks would open nearly 3 percent higher when trading begins in New York on Monday morning. The benchmark Stoxx Europe 600 index climbed about 1 percent during early trading.
In a joint statement, released on Monday after weekend talks in Geneva, the United States and China said they had reached an agreement to reduce their respective tariffs for 90 days while trade negotiations continue.
The United States would reduce the tariff on Chinese imports to 30 percent from its current 145 percent, while China would lower its import duty on American goods to 10 percent from 125 percent.
The statement was released in the late afternoon in Asia, after most stock exchanges had stopped trading for the day. Earlier in the day, stocks in Japan, South Korea, and mainland China had edged higher in anticipation of progress on easing trade tensions between the United States and China.
Over the weekend, Washington and Beijing held their first meetings since ratcheting up tit-for-tat trade barriers on each other, effectively blocking much of the trade between the countries. After the trade conversations concluded, officials from both sides touted significant progress.
The escalating trade war has left financial markets uneasy.
Economists have warned that barriers — so high as to effectively block much of the trade between the world’s two biggest economies — have significantly increased the possibility of an economic downturn. That includes in Asia, where some of the biggest economies, including Japan and South Korea, are heavily reliant on both China and the United States as trade partners.
The World Trade Organization has forecast that the continuing division of the global economy into “rival blocs” could cut global gross domestic product by nearly 7 percent over the long run. In April, the International Monetary Fund lowered its 2025 outlook for all Group of 7 nations, including Germany and Japan, the world’s third- and fourth-largest economies, due largely to U.S. tariffs.
Last week, China reported that its exports to the United States in April dropped 21 percent from a year earlier. Recession warnings are beginning to emerge in the United States.
River Akira Davis covers Japan, including its economy and businesses, and is based in Tokyo.
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