Highlights
Stocks soared Monday on news of a US-China rollback of trade tariffs while the two sides negotiate a new trade deal. The Dow Jones industrial average jumped 2.8 percent, the S&P 500 advanced 3.3 percent, and the Nasdaq rallied 4.4 percent. Bond yields, the dollar and oil prices all rose.
Risk assets rallied and safe haven assets tanked on news in the wee hours Monday morning that the two sides had both agreed to cut tariffs by 115 percent for 90 days while talks continue. The two sides agreed to extend the lower tariff rates beyond 90 days if needed for more talks. The latest agreement excludes US tariffs on autos, steel and aluminum.
The progress represents a significant cooling in trade tensions with Treasury Secretary Scott Bessent saying plainly the US wants trade, a big shift from President Trump's apparent willingness in early April to dump the global trading system in favor of domestic production. Hopes for a US-China deal were bolstered when the US and UK struck a tentative trade pact last week. Trump teased the idea of a meeting with Chinese President Xi as early as this week
Stocks that have suffered most from worries about trade disruption, including megacaps like Amazon, Apple, and Tesla, were among the biggest winners on Monday, helping the Nasdaq to outperform. Among sectors, best performers included technology, consumer discretionary, communications services and energy. Lagging were utilities, the defensive play.
Risk assets rallied and safe haven assets tanked on news in the wee hours Monday morning that the two sides had both agreed to cut tariffs by 115 percent for 90 days while talks continue. The two sides agreed to extend the lower tariff rates beyond 90 days if needed for more talks. The latest agreement excludes US tariffs on autos, steel and aluminum.
The progress represents a significant cooling in trade tensions with Treasury Secretary Scott Bessent saying plainly the US wants trade, a big shift from President Trump's apparent willingness in early April to dump the global trading system in favor of domestic production. Hopes for a US-China deal were bolstered when the US and UK struck a tentative trade pact last week. Trump teased the idea of a meeting with Chinese President Xi as early as this week
Stocks that have suffered most from worries about trade disruption, including megacaps like Amazon, Apple, and Tesla, were among the biggest winners on Monday, helping the Nasdaq to outperform. Among sectors, best performers included technology, consumer discretionary, communications services and energy. Lagging were utilities, the defensive play.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
