US stocks notched one of their biggest jumps in recent years, as the de-escalation of tariff tensions between the US and China sparked a strong rally for risky assets.
The S&P 500 closed 3.3 per cent higher on Monday. That was its biggest jump since April 9, but also ranked as its third-biggest one-day gain of the past five years.
Consumer cyclicals, energy stocks and financials among the best performers in Wall Street’s benchmark index after the world’s two largest economies agreed to drastically scale back tariffs for 90 days.
The tech-heavy Nasdaq Composite closed 4.3 per cent higher, ranking as its fourth-biggest single-session jump in the past five years.
Shares in Meta, Apple and Nvidia leapt 7.9 per cent, 6.3 per cent and 5.4 per cent, respectively.
Monday’s gains extended a recent surge for US stocks, which have rebounded in recent weeks from a sharp sell-off in the days after Trump’s “liberation day” tariff announcements on April 2. The latest move left the S&P 500 close to erasing all of its year-to-date losses, and came as the dollar rallied against other major currencies.
The tariff reduction “really is a big and positive surprise” and “represents a far larger backtracking from Trump than we had expected,” said David Seif, chief economist for developed markets at Nomura.
He cautioned, however, that “things can swing back very quickly in the other direction, and we would not preclude tariff rates rising back up on July 8 for the rest of the world and August 10 for China” when the two relevant 90-day pauses expire.
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