Wall Street rebounds after Beijing-Washington tariff deal

“US-China truce sends stock prices soaring,” headlined Bloomberg after the announcement on Monday, May 12, of the agreement between the two superpowers to end their trade war. In detail, the two sides agreed to suspend the reciprocal customs duties they had imposed on each other for 90 days. On the American side, the tariffs were reduced from 145% to 30%, while on the Chinese side, they were reduced from 125% to 10%.

The S&P 500 index jumped 2.8% at the opening, surpassing early April levels, just before Donald Trump's "liberation day," which sent markets around the world plummeting, the US business website reports. Meanwhile, the Nasdaq, the US technology exchange, opened up 3.3%.

The conditions of this "pause" have been a very pleasant surprise for market watchers. "No one saw such low rates coming from China. It's a big surprise, and a good one," said Jeff Buchbinder, head of equity strategy at brokerage LPL Financial, as quoted by Bloomberg . Dan Ives, managing director at Wedbush Securities, a financial services firm, echoed the sentiment, as quoted by The Wall Street Journal :

“This is the best possible scenario for investors.”

“It's almost as if [Liberation Day] never happened,” said David Morrison, a market analyst at Trade Nation, in comments reported by the New York business daily. On April 2, the American president decided to implement tariffs on almost all of the United States' trading partners, sending a large portion of the world's financial markets into a tailspin.

“The easing of trade tensions between the United States and China gives investors an indication that the Trump administration is taking a softer approach to the conflicts that have roiled global markets in recent weeks, with hopes that the U.S. economy can avoid a recession,” Bloomberg summarizes in another article .