In a powerful rally across global financial markets, the Dow Jones Industrial Average surged more than 1,000 points at Monday’s open, as news of a breakthrough U.S.-China trade agreement sparked investor optimism and renewed risk appetite.
Wall Street responded swiftly to the announcement that the world’s two largest economies have agreed to a 90-day tariff truce, sending stocks sharply higher. The S&P 500 climbed 2.8%, while the Nasdaq soared 4%, led by a strong rebound in tech shares. The rally marks one of the largest single-day point gains for the Dow in 2025 and builds on bullish momentum seen last week.
Tariff Truce Sparks Investor Confidence
The catalyst behind the market jump was a weekend agreement between U.S. and Chinese trade officials to significantly scale back reciprocal tariffs. According to a White House statement and further remarks by U.S. Treasury Secretary Scott Bessent, both sides will temporarily pause tariff escalations and cut duties dramatically.
“We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%,” Bessent said during a Monday morning news conference.
Under the deal:
- U.S. tariffs on Chinese goods will drop from 145% to 30%
- Chinese tariffs on U.S. exports will fall from 125% to 10%
This agreement is widely seen as a step toward de-escalation in what had been a prolonged trade conflict rattling global supply chains and investor sentiment.
Global Markets Join the Rally
The bullish sentiment extended beyond U.S. borders:
- Asian and European stocks ticked higher as investor jitters eased.
- Major indexes in Shanghai, Tokyo, and Frankfurt posted gains following the news.
The broader financial markets also reflected a strong risk-on mood. The U.S. dollar strengthened, Treasury yields rose, and oil prices edged higher. On the flip side, gold fell sharply by 3.2%, now hovering near $3,236 per ounce, as investors rotated into equities and other higher-yielding assets.
Crypto and Commodities React
Even Bitcoin joined the rally, surging past $105,000, buoyed by easing macroeconomic fears and a favorable outlook on liquidity as global tensions cool. The move adds to an already strong performance for BTC in 2025.
What’s Next: Economic Data and Earnings on Deck
While Monday’s surge reflects optimism around the trade deal, investors are also bracing for a busy week of key economic indicators and earnings releases. On Tuesday, the Consumer Price Index (CPI) report will offer fresh insight into inflation trends a critical data point for Fed watchers. Thursday will bring retail sales figures and the Producer Price Index (PPI), which could further influence market sentiment.
Additionally, earnings reports from Walmart (WMT), Sony (SONY), and Alibaba (BABA) are expected to draw investor attention, offering a read on consumer strength and global corporate performance amid easing trade tensions.
Markets have welcomed the U.S.-China tariff reduction deal as a major turning point in global trade diplomacy. With tariffs slashed and a temporary pause on escalations, optimism is building that sustained progress could follow. While volatility could return with upcoming inflation data and earnings results, the sharp rally in equities signals growing confidence in the global recovery narrative.
Investors will continue to monitor diplomatic developments closely, but for now, the mood is one of cautious celebration, as Wall Street rides a wave of renewed bullish momentum.
