US stock futures surged in premarket trading on Monday following the United States and China’s agreement to a temporary 90-day tariff truce, reviving a wave of confidence in global financial markets. The unexpected move, which resulted from two days of heated trade negotiations in Geneva, was a major leap towards smoothing trade tensions between the two economic giants. The shift to roll back high tariffs on both sides drove US stock futures and Dow futures up by over 1,000 points, as the S&P 500 and Nasdaq 100 futures also saw solid gains. The dollar jumped to a monthly peak, risk appetite returned, and a tech rally fueled a bullish sentiment in Asian and European markets.
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Key Terms of the US-China Truce and Market Response
In an unusual show of cooperation with each other, both Washington and Beijing consented to cut tariffs—temporarily, starting May 14—by 90 days. America cut tariffs on Chinese imports from a bellicose 145% to 30%, while China reduced duties on American imports from 125% to a mere 10%. These remarkable reductions saw market sentiment and US stock futures rebound quickly.
Treasury Secretary Scott Bessent underscored that although certain legacy tariffs of past trade rounds are still in place, this deal demonstrates that neither nation wants to decouple. Investors and analysts both appreciated the news, as Deutsche Bank labeled it as “better than expected.” More notably, these reductions are particular to US-China trade and not general global tariffs, providing relief on a targeted basis and US stock futures.
Dow futures rallied more than 1,000 points, S&P 500 futures rose by 3%, and Nasdaq 100 futures jumped nearly 4%, ahead of one of the strongest opening days on Wall Street in over a month. US stock futures looked set to hold their gains as investor confidence grew stronger. Most analysts now regard US stock futures as the prime gauge of faith in trade settlement endeavors.
Global Response: Dollar surges, gold falls, Oil and Tech Rebound
The dollar was the largest currency market gainer. The Bloomberg Dollar Spot Index gained 1%, up to an over one-month high, as investors retreat from havens such as the yen and gold. The euro fell and the 10-year US Treasury yield increased seven basis points to 4.45%, a signal of reversing rate-cut expectations.
Gold prices plummeted over 3% to under $3,300 an ounce due to renewed faith in global stability. In the energy sector, Brent crude oil surged past $65 per barrel, with experts attributing expectations of increased trade volumes and rising demand.
Tech shares and US stock futures were the biggest gainers of this trade truce, with Nvidia, Amazon, Apple, and Tesla all gaining more than 5% in premarket trading. Nasdaq 100 futures also suggested breaking back into bull market territory, a good indicator of investor sentiment coming back into the high-growth sector.
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Tariff Pause Lifts Global Markets as Sentiment Rebounds
The ceasefire spilled over into other US markets. Asian and European markets also saw solid advances led by a 3% rise in Hong Kong’s Hang Seng Index. European leading indices all posted 1%+ increases, indicating world relief. Even Bitcoin jumped to its highest level since January, reflecting a broad rebound in investor risk appetite.
Even with the optimism, the 90-day hiatus is regarded as an opening move and not a conclusion. Both countries asserted deeper talks and long-term trade arrangements are needed. While the threat of additional tariffs is on the shelf—for the moment—current restrictions and leftover structural issues remain.
What’s Next: Temporary Relief or Beginning of Real Reform?
US stock futures have welcomed the news with open arms, yet investors are being cautiously optimistic. The 90-day window is a narrow window for the US and China to come to a more enduring trade agreement. Treasury officials have signaled more meetings are in the pipeline in the weeks ahead, and while complete tariff reversals are not on the cards, the truce does suggest there is a fresh willingness to cooperate.
Sectoral tariffs and older trade restrictions remain in effect, and any derailment in talks could quickly reverse gains. For now, however, the rollback has reawakened bullish sentiment, especially in risk-sensitive sectors like technology, energy, and emerging markets.
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