Let us know about free updates
Simply sign up for US stock Myft Digest and it will be delivered directly to your inbox.
US stocks spiked Monday as investors bet that Washington-Beijing tariff contracts meant that Donald Trump’s trade war is beyond the most intense stage.
The Blue-chip S&P 500 ended 3.3% higher, while the high-tech NASDAQ Composite closed 4.3%. The dollar rose 1.5% against a basket of six fellow members. This was the biggest rise every day after Trump’s election on November 5th.
In Asia, Japan’s Topix rose 1.4% in early trading on Tuesday, and the yen strengthened by 0.3% after a sharp sale on Monday.
“Peak tariffs have been extremely important in the past,” said Ajayi Rajadhiyaksha, global chair of Barclays’ research. “We’re growing this year, but that’s not like a recession.”
The US and China said on Monday that they will cut tariffs for at least the next 90 days, following their weekend speech in Geneva. US tariffs will be reduced to 30% and China will be reduced to 10%. Both of these figures lie above other taxes that precede the 2025 trade dispute between the two largest economies in the world.
The negotiations show significant emissions in Trump’s global tariff attack, following Trump’s announcement of “liberation day” last month, with the Blue Chip S&P 500 sending the Blue Chip S&P 500 falling 15%. The S&P 500 now erases these losses, falling just 0.6% in 2025.
Meanwhile, NASDAQ has skyrocketed 27% from the low daytime on April 7th, with only 3.1% off to date.
Trump suspended most of the so-called mutual tariffs on April 9, a week after its announcement, but remained in China, the source of US imports. Some economists had predicted a recession this year as a result of taxation.
However, US-China trading is now reducing those concerns. Wall Street Bank’s Goldman Sachs said Monday that there is a 35% chance that the US will fall into a recession over the next year, starting from the previous 45%.
“The market defaults what we assume is currently in a 10-30 world. It’s 10% (customer tax) in most of the world, and 30% in China,” says Rajadhi Yaksha, who doesn’t think there will be a major change in policy after 90 days.
Consultant Capital Economics calculated that due to the obligations ahead of Trump’s return to power this year, the total US tariffs on China would be about 40%, and China’s tariffs on the US would be about 25%.
The US Treasury yield rose on Monday, indicating traders are reclaiming their bets on the recession this year.
Moving with growth expectations, the 10-year financial yield rose to its highest level in a month, rising 0.09 percentage points to 4.46 per cent. The two-year yield, moving along with interest rate expectations, rose 0.11 percentage points to 4% as the odds of a major interest rate cut from the Federal Reserve were reduced by traders.
Tech stocks and groups selling discretionary consumer goods were the biggest winners as U.S. stocks surged Monday. All 30 shares in the Philadelphia Semiconductor Index saw a 7% jump in gauge, resulting in higher sessions, with retailer Target and Home Depot climbing 4.9% and 3.8% respectively.
The strategist said that S&P 500 rally tends to do well in clearly-directed markets, but it tends to lose more, as it often tends to lose, as it tends to lose more, as it often tends to lose.
Recommended
However, “stolen stocks have not yet come out of the woods,” analysts at Deutsche Bank said they stressed that “wide-sector tariffs” on drugs, semiconductors and copper are still expected in the coming weeks.
“Uncertainty is still on us,” said Priya Misra, bond portfolio manager at JPMorgan Asset Management.
She added: “Companies still have to think about supply chains, investments, employment… There have been some damages. The dust has not settled completely.”
