Wall Street staged a powerful comeback overnight as investors cheered a surprise agreement between the US and China to sharply cut reciprocal tariffs for 90 days. The move—reached after weekend negotiations in Geneva—sparked a global risk-on rally and gave fresh fuel to tech stocks.
The Dow surged more than 1,100 points to close at 42,410, up 2.81%. The S&P 500 gained 3.26%, trimming its year-to-date losses to just 0.6%. The Nasdaq rose 4.35% to 18,708, posting its best day since early April.
The VIX—Wall Street’s fear gauge—fell below 20 for the first time since March, easing concerns of near-term recession.
Tech stocks lead the charge
The “Magnificent Seven” tech names soared as investors priced in lower costs and improved sentiment. Amazon jumped 8.07%, Meta rose 7.92%, and Tesla added 6.75%. Apple climbed 6.31% after securing fresh tariff relief, and Nvidia gained 5.44% despite lingering export concerns. Google and Microsoft also closed firmly higher.
The rally added hundreds of billions in market cap to tech giants, reversing much of the damage inflicted by April’s tariff escalation.
Tariff rollback details and market impact
Under the new deal, US tariffs on Chinese imports fall from 145% to 30%, while China cuts its own from 125% to 10%. The agreement is temporary, but markets reacted as though a longer-term resolution may follow. Treasury Secretary Scott Bessent called the talks “very productive”, and further negotiations are planned in coming weeks.
Defensive stocks retreated on the shift in sentiment. Coca-Cola, Philip Morris, and AT&T all fell as money rotated into growth and cyclical names.
Drug prices
In a separate development, President Trump signed an executive order on Monday aimed at slashing prescription drug prices by tying them to the lowest rates paid in other developed countries. The sweeping “Most Favored Nation” policy would force pharmaceutical firms to match overseas benchmarks or face regulatory action.
Commodities and the dollar
WTI crude is trading 1.7% higher at US$62.08 a barrel.
Brent crude is trading 1.78% higher at US$65.05 a barrel.
Spot gold is trading 2.72% lower at US$3,234.54 an ounce.
One Australian dollar is buying 63.72 US cents.
Futures
The SPI futures are pointing to a 93 point rise.
