US Stock Futures Soar Following US-China Tariff Deal

US stock futures sprang upward on Monday following a breakthrough deal between the US and China to temporarily reduce reciprocal tariffs. This comes as a relief to markets concerned about the potential economic fallout from the ongoing trade war. Futures tied to the S&P 500 surged 3%, while those linked to the Dow Jones Industrial Average climbed an impressive 2.4%, translating to roughly 1,000 points. Contracts tied to the tech-centric Nasdaq 100 were the standout performers, catapulting 4%. Wall Street is bracing for a robust trading session after both nations agreed to a 90-day halt on tariffs, a decision that exceeded investor expectations in terms of tariff reductions. The US will slash its duties on most Chinese imports from 145% to 30%, and China will lower its tax on US goods from 125% to 10%.

This positive development spurred investors to flock to large-cap tech stocks previously impacted by trade war concerns. AI chip powerhouse Nvidia jumped 5%, with tech giants like Amazon, Apple, and Tesla also experiencing notable gains. However, pharmaceutical stocks faced a downturn, as the sector braces for pressure from the trade conflict, especially after President Trump announced plans to reduce US drug prices by as much as 80%. Shares in Danish diet drug producer Novo Nordisk fell, alongside US competitor Eli Lilly and others.

On another front, the dollar and US Treasury yields saw an increase, and oil led a robust commodities rally. Traders are keenly awaiting key inflation data scheduled for release this week, which will provide the first insights into the inflationary impact of Trump’s tariffs. Reports include April’s Consumer Price Index due Tuesday, followed by retail sales and the Producer Price Index on Thursday. Notable earnings announcements this week come from Fox, Monday.com, and Chegg, all set to report on Monday, with results from Sony, Alibaba, and Walmart expected later in the week.