Wall Street Rallies on U.S.-China Trade Deal; Nasdaq Jumps 3.45%
The tariff pause gave Wall Street and its key sectors—particularly retail and technology—a welcome boost.
Quick overview
- All major sectors closed in the green on Monday, with consumer discretionary and technology stocks leading the rally.
- The S&P 500 reached its highest level since early March, while the Dow Jones and Nasdaq also saw significant gains.
- The rally was fueled by a new trade agreement between the U.S. and China, which includes a temporary easing of tariffs.
- Federal Reserve Governor Adriana Kugler warned that ongoing tariff policies could still drive inflation higher and impact economic growth.
All major sectors closed in the green on Monday, led by consumer discretionary and technology stocks, as Wall Street rallied strongly following a new trade agreement between the United States and China.
The S&P 500 reached its highest level since early March.
The Dow Jones Industrial Average, made up of 30 blue-chip companies, rose 2.81% to 42,410.10 points. The S&P 500, tracking the largest U.S. firms by market cap, gained 3.26% to 5,844.19, while the tech-heavy Nasdaq Composite surged 4.35% to 18,708.34.
The rally was driven by news that the U.S. and China had agreed to temporarily ease trade tensions. As part of a 90-day truce, the U.S. will reduce tariffs on Chinese imports from 145% to 30%, while China will cut tariffs on U.S. goods from 125% to 10%, following a weekend of negotiations.
All sectors finished the session with gains, with consumer discretionary and tech standing out. Within the Dow Jones, most components posted strong performances. Leading the charge were Amazon.com (+8.09%), Nike (+7.34%), and Apple (+6.31%).
The tariff pause gave Wall Street and its key sectors—particularly retail and technology—a welcome boost. However, the sustainability of this rally will depend on continued progress in trade talks between the U.S. and China.
Fed Perspective: Inflation Risks Linger
Federal Reserve Governor Adriana Kugler commented that the Trump administration’s tariff policies are likely to drive inflation higher and weigh on economic growth, despite the recent tariff reductions announced over the weekend.
“Trade policy is evolving and likely to continue changing,” said Kugler. “Still, it appears likely to have significant economic effects, even if tariff rates remain near their current announced levels.” She also noted that average U.S. tariff levels remain far above historical norms not seen in decades.
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