Wall Street gains following US-China tariff truce

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Wall Street gains following US-China tariff truce

The S&P 500 has hit its highest since early March as a crucial US-China agreement to slash tariffs put investors worldwide at ease after weeks of uncertainty around the future of global trade.

The Dow Jones Industrial Average rose 2.51 per cent to an over one-month peak at 9.45am while the Nasdaq Composite gained 3.34 per cent to its highest in more than two months.

The S&P 500 advanced 2.53 per cent, surpassing its 200-day moving average for the first time since late March.

The US will cut extra tariffs it imposed on ******** imports in April this year to 30 per cent from 145 per cent and ******** duties on US imports will fall to 10 per cent from 125 per cent, the two countries’ governments said on Monday.

The new measures are effective for 90 days.

Most megacaps jumped, with Nvidia rising 4.0 per cent and Tesla adding 4.7 per cent.

An index of semiconductor stocks also leapt 5.9 per cent to an over two-month high.

Apple shares rose 4.9 per cent after a report said the company was considering raising the prices of its northern hemisphere autumn iPhone lineup.

The stock was last up 6.2 per cent.

“The market has to re-calibrate to what things look like before ‘Liberation Day’ and that looks like a very constructive growing economy,” said Thomas Hayes, chairman at Great Hill Capital LLC.

US President Donald Trump’s April 2 tariff announcements, dubbed “Liberation Day,” had raised fears of a global recession and forced many businesses to put big spending decisions on hold.

Since then, however, upbeat earnings reports, Trump’s softening stance on tariffs and a US-*** limited trade agreement have helped both the S&P 500 and the tech-heavy Nasdaq erase all losses incurred following April 2.

The blue-chip Dow has recouped nearly all its declines too.

Wall Street’s “fear gauge,” the CBOE Volatility Index, retreated to 19.19 on Monday – a level last observed before the tariff turmoil in April.

All 11 S&P 500 sub-sectors were trading in positive territory on the day, with consumer discretionary leading gains with a 5.2 per cent jump.

Crude oil prices also surged close to 4.0 per cent after the US-China announcement, lifting shares of top producers Chevron and Exxon Mobil more than 2.0 per cent each.

“You (will) have a bunch of forced buyers that are going to be in the market playing catch up,” said Great Hill Capital’s Hayes.

Retail giant Walmart, network equipment maker Cisco and farm equipment maker Deere are among the prominent companies set to report results this week.

Several Federal Reserve officials including chair Jerome Powell are also slated to make public remarks over the week.

Traders expect the Fed to deliver two 25-basis-point rate cuts by the end of 2025, compared with three cuts seen at the start of May, according to data compiled by LSEG.

Advancing issues outnumbered decliners by a 4.83-to-1 ratio on the NYSE and by a 4.34-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and two new low while the Nasdaq Composite recorded 63 new highs and 14 new lows.

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