Markets rally after Trump announces “total reset” in US-China ties; investors cheer tariff rollbacks and optimism around final deal.
New York, May 13:
Wall Street witnessed a massive rally on Monday after the United States and China moved to de-escalate their long-standing trade war, with President Donald Trump declaring a “total reset” in bilateral relations.
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Markets responded positively to the announcement, with all major indices closing sharply higher:
- Dow Jones Industrial Average surged 2.8% to finish at 42,410.10
- S&P 500 jumped 3.3% to close at 5,844.19
- Nasdaq Composite led the charge with a 4.4% gain, ending at 18,708.34
“The market is clearly looking at the overall trend towards de-escalation,” said Karl Haeling of LBBW.
Tariff Cuts Signal Progress
The rally came after weekend negotiations in Switzerland led to a temporary tariff reduction:
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- US tariffs on Chinese imports cut from 145% to 30%
- China’s duties on US goods reduced from 125% to 10%
Investors interpreted the move as a strong step toward a final trade agreement, alongside last week’s progress with the UK on a separate trade pact.
“This should allow business leaders to make long-delayed investment and spending decisions,” noted Briefing.com in a report.
Market Outlook: Cautious Optimism
Despite the surge, analysts remain cautious about the lack of detailed framework in the recent announcements.
Also Read: US, China Seal Trade Pact to Slash Deficit Amid Warming Ties
“There are still a lot of details to be ironed out,” Haeling warned.
Attention now shifts to Tuesday’s US Consumer Price Index (CPI) data for April, which will be closely watched for inflation signals tied to the previous tariff regime.
Markets globally have been volatile in recent months due to escalating US-China tensions, making this de-escalation a critical moment for investor sentiment.
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Wall Street rally, US China trade war, Trump China tariffs, Dow Jones, Nasdaq, S&P 500, tariff rollback, global markets, CPI data, US economy, trade de-escalation, investment trends