By Andrew Moran
Contributing Writer
U.S. stocks rallied on Monday after the United States and China agreed to temporary tariff reductions.
The blue-chip Dow Jones Industrial Average soared by more than 1,000 points, or 2.4%. The index has erased most of 2025’s losses and is down by about 0.9%.
The tech-heavy Nasdaq Composite Index is on track to exit the bear market. To kick off the trading week, it soared by more than 600 points, or 3.4%. Year-to-date, the Nasdaq has tumbled by 4%.
The broader S&P 500 climbed by more than 100 points, or 2.4%, and is down by about 1% so far in 2025.
Investors cheered the world’s two largest economies temporarily lowering their tariff rates following a weekend meeting in Switzerland.
“Markets are reacting extremely positively to the news that the Trump administration was using tariffs as a negotiating tactic after all,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in an email.
“This is a significant change for markets and should be a continuation of the healing that has happened since the April 2 tariffs were paused for 90 days.”
The United States will lower its tariffs on Chinese imports to 30% from 145%. In exchange, the Chinese regime will cut its levies on U.S. goods to 10% from 125%.
Beijing will also remove its nontariff trade barriers, U.S. President Donald Trump confirmed to the media.
A deal has yet to be finalized.
“We have to get it papered,” Trump told reporters on Monday. “But they’ve agreed to open up China.”
In an interview with CNBC’s “Squawk Box” on Monday, Treasury Secretary Scott Bessent confirmed that he will be meeting with Chinese officials “in the next few weeks” and “avoid the upward tariff pressure.”
“We have a process now,” Bessent said. “We have a meeting mechanism. We loosely christened it the ‘Geneva Mechanism.’”
This latest development occurs days after the United States announced a trade agreement with the UK, which lowers levies on various products and boosts reciprocal market access for several industries.
Both deals spotlight that baseline universal tariffs will remain in place, according to Commerce Secretary Howard Lutnick.
“We do expect a 10% baseline tariff to be in place for the foreseeable future,” Lutnick said in an interview with CNN’s “State of the Union” on Sunday.
“Businesses, their job is to try to sell to the American consumer, and domestically produced products are not going to have that tariff. So the foreigners are going to finally have to compete.”
Oil, Gold, and Bonds
Crude oil prices also soared because of the latest global trade developments.
West Texas Intermediate crude futures, a U.S. benchmark for oil prices, increased by more than 2% to more than $62 per barrel on the New York Mercantile Exchange.
Brent, a global metric for oil prices, also added 2% on London’s ICE Futures exchange, topping $65 per barrel.
Yields on U.S. government bonds were green across the board. The benchmark 10-year Treasury yield firmed above 4.43%. The 20- and 30-year Treasury yields also rose, topping 4.9% and 4.87%, respectively.
Gold prices tanked by about $100, or 3%, to $3,245 per ounce.
Silver, gold’s sister metal, also slumped, as it fell by about 0.5% to below $33 per ounce.
Rest of the Week
In addition to monitoring further trade news, the financial markets will also digest a wave of economic data.
The April consumer price index report will be released on May 13. Estimates suggest that the headline annual inflation rate will be unchanged at 2.4%.
April’s producer price index, a precursor for pipeline inflation, will come out on May 12 and is expected to show a modest jump.
The Census Bureau will release the April retail sales data on May 12, and the consensus forecast signals a flat reading.
The week will end with the University of Michigan’s preliminary May Consumer Sentiment Index, which is expected to reveal a rebound.
“This weekend’s development is a small clearing in the middle of a forest,” Mark Malek, chief investment officer at Siebert Financial, said in an email. “The week ahead will feature important economic numbers about inflation, trade, sentiment, and inflation expectations. Please pay attention to them.”
