U.S. markets roared to life Monday after President Donald Trump and China agreed to reduce tariffs for 90 days.
The Dow Jones Industrial Average surged 1,161 points—up 2.8%—erasing nearly all of 2025’s losses.The S&P 500 climbed 3.3%, and the tech-heavy Nasdaq Composite soared 4.35%, officially exiting bear market territory and launching a new bull market.
The Monday rally marked the largest single-day gains in over a month for all three major indexes.
Investors responded with enthusiasm after the United States and China agreed to reduce tariffs by a staggering 115 percentage points. U.S. tariffs on Chinese goods dropped from 145% to 30%, while Beijing cut its levies on American exports from 125% to just 10%.
The deal also includes the removal of several non-tariff barriers imposed by China, long a point of contention among American manufacturers and exporters.
President Trump told reporters the agreement isn’t yet finalized but called it a major opening of the Chinese market. “We have to get it papered,” he said Monday, “but they’ve agreed to open up China.”
Treasury Secretary Scott Bessent, who helped broker the deal alongside U.S. Trade Representative Jamieson Greer in Geneva, confirmed that a framework is now in place to avoid further tariff hikes.
“We have a process now,” Bessent said, referring to what he called the “Geneva Mechanism” for ongoing dialogue between the two economic powers.
The move comes just days after Trump finalized a separate trade pact with the United Kingdom, reinforcing the administration’s strategy of deal-making through strong negotiating tactics.
“Markets are reacting extremely positively to the news that the Trump administration was using tariffs as a negotiating tactic after all,” said Chris Zaccarelli of Northlight Asset Management.
The broader economic impact was immediate. Crude oil prices climbed nearly 2% amid growing expectations of stabilized global trade. West Texas Intermediate crude rose to nearly $62 a barrel, while Brent crude approached $65. Meanwhile, the U.S. dollar jumped 1.4% against a basket of global currencies.
Bond yields also rose, with the benchmark 10-year Treasury yield moving back above 4.45%. Conversely, gold prices—a typical safe haven during uncertainty—plunged by nearly $100, or 3%, to $3,240 per ounce as investors rushed into equities and riskier assets. The CBOE Volatility Index fell more than 15%, signaling renewed confidence.
Sectors most affected by the trade war—particularly technology and autos—posted some of the biggest gains. Apple jumped 6.3%, Tesla rose 6.75%, Nvidia added 5.4%, and Amazon surged 8.1%. Automakers rallied as well, with Stellantis up 6.5% and General Motors gaining 4.4%.
“This is a big positive surprise,” said Jeff Buchbinder, chief equity strategist at LPL Financial. “No one had these low China tariff rates on their bingo cards.”
Commerce Secretary Howard Lutnick cautioned that a baseline 10% tariff would remain “for the foreseeable future,” describing it as a way to protect American manufacturing while keeping the pressure on foreign producers. “The foreigners are going to finally have to compete,” Lutnick told CNN.
“This temporary fix may become something more permanent,” said Ulrike Hoffmann-Burchardi of UBS Global Wealth Management. “Investors will now be focused on signs that the progress continues.”
With a 90-day pause on tariff hikes now in place and a framework for future talks secured, the administration is signaling it’s not just managing crises—it’s reshaping global trade.