U.S. stock markets bounce back, boosting shares of Tesla and Apple due to a new trade agreement.
Stock markets roar with joy as US-China trade progress shines 🚀
Wall Street celebrated on Monday as investors breathed a sigh of relief with the reported progress in trade negotiations between the US and China.
The S&P 500 soared over 2.6% as markets opened, while the Dow Jones surged by an impressive 2.41%. Tech giants, particularly hard-hit by President Donald Trump's tariff war, saw some relief. Amazon and Nike experienced gains of over seven and six percent respectively, while the tech-heavy Nasdaq rallied an impressive 3.5%.
Despite the positive move, tech titans like Apple and Elon Musk's Tesla still showed losses for the year, with Apple surging only five percent and Tesla gaining nearly seven percent, yet the yearly losses remain at over 14% and 16% respectively.
The optimism was fueled by the White House reducing its import tax on Chinese goods to 30% from a whopping 145%, and China reciprocating by dropping its tariffs to 10% from 125% as both sides worked towards a permanent settlement.
In London, the FTSE 100 also saw a gain of 0.6%, led by a near 10% surge from Standard Charted, which had been severely impacted by the trade war due to its extensive ties with Asian economies. Miners, an industry exposed to China, saw impressive growth with Glencore and Anglo American up over six percent, and Antofagasta over five percent.
Amidst the market tensions easing, gold took a three percent hit, falling to around $3,240.45, causing Fresnillo and Endeavour, miners of the precious metal, to top the list of fallers in London with losses of over five percent.
Europe also sang the green day chorus, with Germany's Dax up 0.22%, Amsterdam's AEX 1.8%, and the Cac 40 in Paris 1.4%.
Analysts warn that the coming months will be vital in maintaining investor sentiment, with Russ Mould, investment director at AJ Bell, stating that the next 90 days are "crucial in determining the longer-term tariff levels between the two countries." Although China will be reluctant to appear weak, it will also be mindful of the situation's delicacy, Mould adds.
The positive momentum could also encourage better trade deals for other countries, as Trump has demonstrated his willingness to make reductions in Liberation Day tariffs. In turn, this may suggest a lesser hit to global trade and reduced concerns about recession, placing investors in a "risk-on mode." 💡
Did You Know? 🌐 With the US-China trade deal in May 2025, the two countries agreed to suspended retaliatory tariffs, reduced tariffs by a combined 115%, and established a mechanism for continued economic and trade discussions. This deal is considered a "historic trade win" by the US administration, designed to address unfair trade practices and support American manufacturing and jobs. As global trade prospects improve, we may expect more positive movements in global equity markets in the near term. 📈😉
- The optimistic stride in the global economy continued, as finance markets in Europe, such as Germany's Dax, Amsterdam's AEX, and the Cac 40 in Paris, also demonstrated growth.
- The positive developments in US-China trade negotiations not only reverberated in Wall Street but also impacted the business sector in London, with the FTSE 100 and tech companies like Amazon and Nike experiencing significant gains.
- Enhanced corporate confidence and reduced concerns about global trade and recession may foster a "risk-on" mentality among investors, possibly leading to the pursuit of better trade deals and improved prospects in the technology sector.
