Dow jumps more than 1,100 points, S&P 500 rises 3% on China-U.S. temporary tariff cut

U.S. equities staged a powerful rebound on Monday as investors cheered a weekend breakthrough that saw Treasury Secretary Scott Bessent and his Chinese counterpart agree in Geneva to cut emergency tariffs to 30% on U.S. imports from China and to 10% on American goods entering China. The Dow Jones Industrial Average leapt 1,161 points, the S&P 500 surged 3.3%, and the Nasdaq Composite jumped 4.4%, marking the strongest single-session gain since early April and erasing nearly all of the benchmark’s year-to-date loss. Volatility evaporated, with the CBOE VIX falling below 20 for the first time since “Liberation Day” tariff hikes sent it briefly above 60.

The tariff truce, valid for at least ninety days while negotiators work on a broader accord, represents a dramatic de-escalation from President Donald Trump’s April move to impose 145% levies on roughly $600 billion of Chinese exports and Beijing’s immediate 125% retaliation. Though neither side detailed a path to permanent reductions, Bessent called the talks “very productive” and said follow-up meetings would be held “within weeks.” Analysts noted that even a still-steep 30% rate was far lower than markets feared, fueling hopes the global economy can dodge a recession and prompting a rally in China-exposed tech giants such as Tesla, Apple and Nvidia.

Relief rippled across asset classes: Treasury yields and oil prices climbed on brighter growth prospects, cyclical and consumer-discretionary shares outperformed, and defensive staples lagged. Still, Bank of America cautioned that the administration’s 10% “baseline” tariff remains in force on most trading partners and warned that the current pause could unravel if talks stall. With pharmaceutical stocks dipping after Trump pledged an executive order to slash drug prices and the Fed now less likely to cut rates, traders will watch whether Monday’s euphoria morphs into a durable up-trend or proves another brief respite in a volatile tariff era.