US stocks shot higher on Monday in the wake of a US-China deal to temporarily slash reciprocal tariffs, a reprieve for markets fretting about the economic damage from a trade war.
The S&P 500 soared 2.9%, while the Dow Jones Industrial Average surged 2.4%, or more than 1,000 points. The tech-heavy Nasdaq Composite led gains, rocketing up nearly 4%.
Wall Street is on track for a banner day after the US and China put tariffs on pause for 90 days, as the scope of the tariff reductions surprised investors. The US is dropping its duties on most Chinese imports from 145% to 30%, while China is lowering its 125% tariff on US goods to 10%.
Investors jumped into shares of Big Tech megacaps bruised by trade war worries. AI chip leader Nvidia popped 5%, with Amazon, Apple, and Tesla also climbing.
President Trump on Monday signed an executive order aimed at lowering prices on drugs sold in the US, after promising on social media to bring in cuts of at least 59%. The plans could end up raising prices overseas, boosting revenue for pharma companies, a White House official said, per Axios.
Meanwhile, the dollar and US Treasury yields climbed, as oil powered higher to lead a rally in commodities.
Traders will get their first sense of the initial inflationary effects of Trump’s tariffs with the release of key inflation data this week. April’s Consumer Price Index (CPI) report is due Tuesday, followed by retail sales and the Producer Price Index (PPI) on Thursday.
