Trump and China declare a trade truce and the Dow Jones soars a thousand points
Tech stocks and the rest of the world loved the news
The big picture: The Dow skyrocketed 1,021 points Monday, a 2.5% leap, after the U.S. and China agreed to slash tariffs temporarily following weekend talks in Switzerland. The S&P 500 surged 2.9%, and the Nasdaq jumped 4%, fueled by optimism over eased trade tensions.
What they’re saying: Treasury Secretary Scott Bessent called the negotiations “very productive,” noting both nations cut “reciprocal” tariffs by 115% for 90 days, dropping U.S. tariffs on Chinese goods to 30% and China’s on U.S. imports to 10%.
By the numbers: Bessent hinted at more talks soon, aiming for a “more fulsome agreement.” Chinese Vice Premier He Lifeng praised the “substantial progress.” Stocks like Best Buy (+8.7%), Dell (+7.8%), and Tesla (+7%) soared, as tariff-sensitive sectors breathed a sigh of relief.
What’s next: Investors now eye whether this détente in the trade war can hold, with Bessent’s next Beijing meeting looming. For now, Wall Street’s partying like it’s 2024.
Tech Stocks Take Off as U.S.-China Tariff Truce Sparks Rally
The big picture: The U.S. and China just hit the pause button on their trade war, slashing tariffs and sending tech and chip stocks into a frenzy!
By the numbers: For tech stocks that had been on edge over the weekend that was the Cue for a market party: Apple soared over 7%, Amazon jumped 8%, and chip giants like Nvidia and TSMC rode the wave.
What they’re saying:“With US/China clearly on an accelerated path for a broader deal, we believe new highs for the market and tech stocks are now on the table in 2025,” said Daniel Ives, global head of technology research at Wedbush Securities.
Dive deeper: The truce eases supply chain fears, especially for companies like Apple, which still makes 90% of its iPhones in China. Chinese tech giants Alibaba and JD.com also caught the updraft.
What’s next: Investors are betting on smoother trade talks ahead, but the 90-day clock is ticking. For now, Wall Street’s sipping the optimism, hoping this breakthrough isn’t just a sugar rush.
Global Markets Rebound On U.S.-China Trade Thaw
The big picture: Wall Street’s cheering of a “huge win” from the U.S.-China trade deal sparked a global rally, proving that the USA is still the global kingmaker when it comes to finance.
Why it matters: Stocks soared—Europe’s Stoxx 600 climbed 1%, Hong Kong shares jumped 3%, and U.S. futures surged. Shares in the international shipping container company Maersk spiked 12% on hopes of revived global trade.
What they’re saying: The 90-day tariff pause, slashing reciprocal duties from over 100% to 10%, is “better than expected,” says Sydbank’s Mikkel Emil Jensen, easing trade war fears. “This is a dream scenario,” Wedbush’s Dan Ives told CNBC, predicting new market highs in 2025. The deal, announced after Geneva talks led by Treasury Secretary Scott Bessent, keeps 20% fentanyl-related tariffs, leaving U.S. duties on China at 30%.
What’s next: Investors see more upside as talks continue but the truce is temporary, and some warn of lingering uncertainty. For now, Global bulls are back, betting on smoother trade and fatter profits.
Trump SLASHES America’s Drug Prices, Big Pharma Stocks Plunge
The big picture: President Donald Trump’s plan to slash US prescription drug prices sent pharmaceutical stocks tumbling worldwide. The proposal aims to align US costs with lower international rates, sparking fears of profit hits.
What they’re saying: Trump made the announcement in a Truth Social post on Sunday afternoon.
“For many years the World has wondered why Prescription Drugs and Pharmaceuticals in the United States States of America were SO MUCH HIGHER IN PRICE THAN THEY WERE IN ANY OTHER NATION, SOMETIMES BEING FIVE TO TEN TIMES MORE EXPENSIVE THAN THE SAME DRUG, MANUFACTURED IN THE EXACT SAME LABORATORY OR PLANT, BY THE SAME COMPANY??? It was always difficult to explain and very embarrassing because, in fact, there was no correct or rightful answer. The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the “suckers” of America, ALONE. Campaign Contributions can do wonders, but not with me, and not with the Republican Party. We are going to do the right thing, something that the Democrats have fought for many years. Therefore, I am pleased to announce that Tomorrow morning, in the White House, at 9:00 A.M., I will be signing one of the most consequential Executive Orders in our Country’s history. Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%. They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA! I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World. Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before. Additionally, on top of everything else, the United States will save TRILLIONS OF DOLLARS. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!“
By the numbers: “There’ll be a 50% reduction, in some cases much more than that,” Trump said, eyeing an executive order to cap prices at levels paid by other high-income countries—potentially 30% to 80% less.
Dive deeper: Investors worry about squeezed margins, especially for generic drug-heavy Asian producers. Yet, some drugmakers, like those in Japan, may try to lean on domestic markets to cushion the blow. Trump’s push, paired with tariff threats, signals a rough road ahead for Big Pharma versus the resurgence being seen in Big Tech.