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US shares increased on Monday as investors bet that the tariff agreement between Washington and Beijing meant that Donald Trump’s trade war was going beyond its strongest phase.
The CHIP Blue-Chip S&P 500 ended the day 3.3 percent higher, while the NASDAQ composition Nasdaq closed 4.3 percent. The dollar jumped 1.5 percent against a basket of six peers, its largest daily growth in the wake of Trump’s elections on November 5th.
In Asia, Japan’s Topix increased 1.4 percent in early trading on Tuesday and Jen strengthened 0.3 percent after a sharp sale on Monday.
“Peak fees are a lot in the past,” said Ajay Rajadhyaksha, Global Research Chair at Barclays. “We will get an increase in growth this year, but this is different from a recession.”
The US and China said on Monday that they would both shorten the fees for at least the next 90 days, after talks in Geneva on the weekend. US tariffs would decrease to 30 percent, while China would drop to 10 percent. Both of these figures are at the top of other taxes that preach the 2025 trade conflict between the two largest economies in the world.
The talks mark a significant escalation in the Global Trump tariff offensive, which had sent the S&P S&P 500 last month falling up to 15 percent following the announcement of Trump’s “ERUMITING Day” last month. S&P 500 has now deleted those losses, and has decreased only 0.6 percent for 2025.
Nasdaq, meanwhile, has increased 27 percent from within its low on April 7 and is only 3.1 percent for the year.
Trump had stopped most of the so -called reciprocal tariffs on April 9, a week after they were notified, but had left them in China, a large source of imports to the US in the country. Some economists were predicting a recession this year as a result of taxes, with higher inflation problems and supply chains raised by US companies.
The US Agreement, however, is now reducing those concerns. The Wall Street Bank Goldman Sachs said Monday that now saw a 35 percent chance of the US slipping into a recession next year, from 45 percent ago.
“Markets are predetermined to assume that we are now in a world 10-30: 10 percent (fees) in most of the world, 30 percent in China,” said Rajadhyaksha, who does not believe there will be significant changes in politics after they are 90 days.
The consulting capital economy estimated that due to the tasks that preceded Trump’s return to power this year, the US total tariffs in China would now drop to about 40 percent, while Chinese tariffs in the US would be about 25 percent.
US Treasury yields increased on Monday, indicating that traders were pulling their bets in a recession this year.
The 10-year treasure yield, which moves with growth expectations, increased to its highest level in one month, with 0.09 percentage points to 4.46 percent. The two-year yield, which moves with interest rate expectations, increased 0.11 percentage points to 4 percent, as the chances of lowering interest rates from the federal reserve were reduced by traders.
Technology shares and groups selling discretional consumer goods were the largest winners as US actions increased on Monday. The 30 shares in the Philadelphia semiconductor index ended the highest session while the meter was dropped 7 percent, while retailers with target and Home depots climbed 4.9 percent and 3.8 percent respectively, respectively.
Strategists said that the S&P 500 rally may further run for systematic traders – which often do well in clear management markets, but tend to lose during periods of instability – gradually rebuild their positions in actions they had lowered after Trump’s tariff notifications on April 2.
But “shares are not yet out of forests,” said Deutsche Bank analysts, who stressed that “broad sectoral fees” in pharmaceuticals, semiconductors and copper are still expected in the coming weeks.
Priya Misra, a fixed income portfolio manager at JPMORGAN ASSET Management, added that “uncertainty is still with us”.
She added: “Companies still have to think about supply chains, investments, hiking.
