Global stocks rally as 90-day deal slashes tariffs and resets trade war tone
Markets across the globe soared on Monday after the United States and China reached a surprise agreement to dramatically roll back tariffs for 90 days—an abrupt de-escalation in a trade war that has rattled financial markets, disrupted global supply chains and spurred recession fears.
Following marathon negotiations in Geneva over the weekend, officials from both nations agreed to cut reciprocal tariffs by 115 percentage points, reducing US tariffs on Chinese goods from 145% to 30%, and Chinese tariffs on US imports from 125% to 10%. The deal takes effect Wednesday.
“This was a far more positive outcome than I would have been expecting over any time frame,” said Kris Bernie, portfolio manager at Kapstream Capital. Markets responded accordingly: European and Asian indices rose sharply, with Germany’s DAX hitting a one-year high and Hong Kong’s Hang Seng climbing 3%. US futures pointed to further gains, with the Nasdaq up 3.8% and the S&P 500 2.8% higher in pre-market trading.
Risk-on rally for tech and semiconductors
Technology and semiconductor stocks, especially those exposed to Chinese markets, led the charge. Nvidia, AMD and Broadcom surged 4–6%, while Apple climbed 6% despite warning that tariffs could add US$900m to its quarterly costs. Amazon rose 8%, buoyed by hopes of resumed low-cost sourcing. In total, the so-called Magnificent 7 tech stocks added US$800bn in market cap—their biggest one-day gain since early April.
Semiconductor supply chain firms including Marvell and TSMC also jumped. European chipmakers such as ASML and Infineon followed suit, while Chinese e-commerce giants Alibaba and JD.com rallied.
“This is a huge win for the market and the bulls,” said Wedbush analyst Dan Ives. “This outcome was better than expected and opens the door for renewed momentum, especially in tech.”
US and China both claim victory
Both sides claimed credit for the breakthrough. In Washington, President Donald Trump described the agreement as a “total reset” and said China had agreed to “open up,” though he noted that final details still needed to be formalised.
Treasury Secretary Scott Bessent said both countries had agreed not to “decouple,” describing the previous tariff regime as a de facto embargo. “We do want trade. We want more balance in trade. And I think both sides are committed to achieving that,” Bessent told reporters in Geneva.
In Beijing, state media framed the deal as a vindication of China’s hard-line stance. Social media commentary hailed the outcome as a win for Chinese negotiators, while the Ministry of Commerce called it “an important step” and urged the US to “completely correct its unilateral tariff practices.”
The 90-day pause does not unwind all trade restrictions. The US will retain a 20% tariff on Chinese goods linked to fentanyl, as well as existing levies on steel, aluminium and select sectors. China has agreed to suspend non-tariff countermeasures, including export curbs on rare earths and retaliatory licensing actions.
Freight rush, rising prices
Retailers and logistics providers anticipate a surge in shipments as companies race to frontload goods during the 90-day window. “I have clients with thousands of containers pre-loaded in China,” said Paul Brashier of ITS Logistics, calling the pause a “pivotal moment” for supply chain planning.
Freight rates are expected to rise sharply. “Ocean freight could be up to 20% in the short term,” warned Peter Sand of Xeneta, citing reduced shipping capacity and increased demand. Companies like Maersk rose over 12% on expectations of higher container volumes.
However, businesses also warned that even 30% tariffs remain painful. “We will have to raise prices for fall deliveries,” said Rick Muskat of Deer Stags, a footwear retailer. “Our costs will go up closer to 40%.”
Industry groups expressed cautious optimism. “It’s a good first step,” said Steve Lamar, CEO of the American Apparel and Footwear Association. “But it will still be an expensive back-to-school and holiday season for most Americans.”
Analysts urge caution despite optimism
Strategists welcomed the reprieve but warned of ongoing uncertainty. “It’s definitely a step in the right direction—game changer is probably a bit much,” said Sean Sequeira, CIO at Australian Eagle Asset Management.
JP Morgan’s Tai Hui noted that while the magnitude of the tariff cut was larger than expected, three months may not be enough time to hammer out a permanent deal. “We are still waiting for further details,” Hui said, citing unresolved issues such as rare earths.
Deutsche Bank analysts called the news “better than expected” and advised clients to stay bullish, particularly in sectors hit hard by earlier tariffs. Barclays’ Emmanuel Cau added that light positioning and high dollar risk premiums left room for markets to “overshoot” on the upside.
The next phase of talks is expected to begin within weeks, with rotating venues in the US, China, or neutral locations. “We need a long-term deal,” said Matthew Shay of the National Retail Federation. “Only then can businesses make predictable investment and sourcing decisions.”
