U.S. stocks opened sharply higher after the U.S. announced a trade deal with China.
The U.S. and China put a 90-day pause on most of the tariffs the countries had imposed on one another. Effective from Wednesday, the U.S. will temporarily reduce tariffs on China to 30%, down from 145%, and China will reduce tariffs on U.S. goods to 10%, down from 125%.
"This was a larger-than-expected de-escalation...though the negotiation process will likely remain challenging," said Lynn Song, chief economist of greater China at Dutch bank ING.
As the deadline for the 90-day pause nears, tensions may reescalate, some said.
"Expect volatility we approach the 90-day reciprocal tariffs deadline," wrote Gina Bolvin, president of Bolvin Wealth Management Group, in a note. "But today, the market is blowing through resistance levels and if it sticks, this is a big WIN for Trump, for stocks and for investors."
At 9:58. ET, the blue-chip Dow soared 2.46%, or 1,013.82 points, to 42,263.20; while the broad S&P 500 jumped 2.58%, or 145.86 points, to 5,805.77; and the tech-heavy Nasdaq rallied 3.45%, or 617.79 points, to 18,546.70. The benchmark 10-year Treasury yield rose to 4.449%.
China's Vice Premier He Lifeng described the meetings on Sunday as "candid, in-depth and constructive" and said "substantial progress was made and important consensus was reached," according to Chinese state media.
Treasury Secretary Scott Bessent said on Monday morning he expected to meet with Chinese officals again in coming weeks to further discuss trade.
“I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,” Bessent said on CNBC’s “Squawk Box.”
A deal with China, one of the U.S.' top trading partners, is seen as a relief for investors who worried tariffs as high as 145% would severely limit trade, raise prices and hurt the U.S. economy.
'Most favored nation' for drug pricing
President Donald Trump said he will sign an executive order that institutes a "most favored nation" policy for drug pricing, reviving a plan from his first term that he said will reduce prescription drug and pharmaceutical prices "almost immediately, by 30% to 80%."
"I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World," Trump said in a post on Truth Social. "Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before."
Cryptocurrency
MicroStrategy founder and executive chairman Michael Saylor announced that the firm acquired 13,390 Bitcoin for approximately $1.34 billion from May 5-11.
MicroStrategy is now known as Strategy.
Bitcoin was last up 0.27% at $104,319.50.