Stocks surged around the world after U.S. and Chinese officials said they agreed to temporarily suspend most of their mutual tariffs.
Futures for the S&P 500 show that U.S. stocks will rise nearly 3% when trading began Monday morning in New York. Nasdaq High-Tech futures climbed nearly 4%.
Hong Kong's benchmark Hang Seng Index jumped about 3%, while the Stoxx Europe 600 index rose about 1% in early trading.
In a joint statement issued Monday after the weekend's talks in Geneva, the United States and China said they had reached a deal to reduce their respective tariffs by 90 days while trade talks continued.
The United States will reduce tariffs on Chinese imports from the current 145% to 30%, while China will reduce its import tariffs on U.S. goods from 125% to 10%.
After the announcement was issued, the US dollar has been exchanged for more and more currencies. U.S. fiscal revenue has also increased.
Over the weekend, Washington and Beijing held their first meeting as they took root in the tit trade barriers, effectively blocking much of the trade between the two countries.
Before the discussion begins, investors have relatively low expectations for a breakthrough in negotiations, which will make tariffs meaningful. However, officials from both sides touted significant progress after the trade dialogue ended.
This is enough to make stocks higher in Japan, South Korea and mainland China in Asia. Details of the U.S.-China tariff agreement were announced in Asia late afternoon after most stock exchanges ceased trading.
Stocks that are most affected by global trade flows surged in the news. For example, AP Moeller-Maersk and Hapag-Lloyd, the world's two largest shipping companies, jumped more than 10%.
Economists warn that U.S.-China trade tensions significantly increase the possibility of a recession.
The World Trade Organization predicts that in the long run, the continued division of the global economy into “competitors” could lead to nearly 7% of global GDP.
In April, the IMF lowered its 2025 outlook for all seven countries, including Germany and Japan, the world's third and fourth largest economy, thanks in large part to U.S. tariffs.
Last week, China reported that its exports to the U.S. in April fell 21% from a year ago. Recession warnings began to appear in the United States.
