{"id":237867,"date":"2025-05-12T10:30:30","date_gmt":"2025-05-12T10:30:30","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/stock-market-today-stocks-soar-as-the-u-s-and-china-agree-tariff-pause\/"},"modified":"2025-05-12T10:30:30","modified_gmt":"2025-05-12T10:30:30","slug":"stock-market-today-stocks-soar-as-the-u-s-and-china-agree-tariff-pause","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=237867","title":{"rendered":"Stock Market Today: Stocks soar as the U.S. and China agree tariff pause"},"content":{"rendered":"


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U.S. stock futures soared in early trading, while the dollar rallied and Treasury bond yields spiked, after Washington and Beijing agreed to a 90-day tariff truce that will re-open billions in trade between the world’s two biggest economies.\u00a0<\/p>\n

Stocks ended modestly lower on Friday, with the S&P 500 slipping by around 4 points into the close of trading to take its weekly decline to around 0.47%, leaving the benchmark just a few points shy of its April 2 ‘Liberation Day’ levels.\u00a0<\/p>\n

The weekend deal to reduce so-called ‘reciprocal’ tariffs between the U.S. and China, reached after a weekend of talks in Switzerland spearheaded by Treasury Secretary Scott Bessent, however, will push stocks firmly north of those levels as the start of trading.\u00a0<\/p>\n

Bessent called the existing tariffs, which included a 145% levy on China-made goods entering the United States, “the equivalent of an embargo, and neither side wants that. We do want trade.”<\/p>\n

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Treasury Secretary Scott Bessent said the U.S. and China are “in agreement that neither side wants to decouple” on trade. <\/p>\n

Bloomberg&sol;Getty Images<\/a><\/p>\n<\/figcaption><\/figure>\n

The two nations agreed to reduce their tariff barriers to a baseline of 10%, the same level put in place last month after President Donald Trump paused his reciprocal levies, for at least 90 days, with the U.S. readout of the agreement declaring the two sides will “establish a mechanism to continue discussions about economic and trade relations.\u201d<\/p>\n

However, the pause does not include sector-specific tariffs on products such as steel, aluminum or autos, nor does it remove the 10% tariffs put in place during the first Trump administration, putting the effective tariff rate on China-made goods at 30%.<\/p>\n

\u201cThis news is undoubtedly better than investors had hoped; in the run up to these talks President Trump signaled that a tariff rate of 80% \u201cfeels about right\u201d whilst there had been other reports that 60% might be the more likely floor,”\u00a0<\/em>said\u00a0<\/em>Lindsay James, investment strategist at London-based Quilter.<\/p>\n

“The reality is better; not quite as good as the 20% level that existed before so-called Liberation Day,” he added.\u00a0“But it’s a significant step towards de-escalation that will likely see a considerable proportion of trade resume, albeit at slightly higher prices.”<\/p>\n

Related: Global investors wary of U.S. stocks as trade war concerns grip sentiment<\/a><\/strong><\/p>\n

Stocks are set to soar at the start of trading on the back of the agreement, which immediately opens up $600 billion in two-way trade and could serve as a template for future talks, particularly with the European Union.<\/p>\n

Futures tied to the S&P 500 suggest an opening bell gain of around 161 points, with the Dow Jones Industrial Average priced for a surge of around 900 points.<\/p>\n

The tech-focused Nasdaq, meanwhile, is set for a gain of around 765 points, with index heavyweights Nvidia\u00a0 (NVDA<\/a><\/strong>) <\/span>, Tesla\u00a0 (TSLA<\/a><\/strong>) <\/span>, Apple\u00a0 (AAPL<\/a><\/strong>) <\/span>\u00a0and Amazon\u00a0 (AMZN<\/a><\/strong>) <\/span>\u00a0all trading between 5% and 8% higher in premarket trading.<\/p>\n

Pharmaceutical stocks, however, were moving sharply lower after President Trump said last night that he would sign an executive order to lower prescription drug prices.<\/p>\n

Eli Lilly\u00a0 (LLY<\/a><\/strong>) <\/span>\u00a0shares were marked 2.66% lower in premarket trading, with Pfizer\u00a0 (PFE<\/a><\/strong>) <\/span>\u00a0down 3.01% and Bristol Myers\u00a0 (BMY<\/a><\/strong>) <\/span>\u00a0down 3.16%.<\/p>\n

In the bond market, news of the deal clipped safe-haven assets such as U.S. Treasuries, sending yields sharply higher, with benchmark 10-year notes rising 7 basis points to 4.431% and 2-year notes leaping 10 basis points to 3.983%.<\/p>\n

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 1.14% higher at 101.491.<\/p>\n

More Economic Analysis:<\/strong><\/p>\n