On May 12, 2025, global financial markets experienced a significant surge following the announcement of a 90-day tariff truce between the United States and China. The Dow Jones Industrial Average jumped 1,160 points, or 2.8%, closing at 42,410.10. The S&P 500 rose 3.3%, and the Nasdaq Composite climbed 4.3%, marking one of the most substantial single-day gains in recent months.
The agreement, reached during negotiations in Geneva, involves the U.S. reducing tariffs on Chinese imports from 145% to 30%, while China lowers its tariffs on U.S. goods from 125% to 10%. This temporary reprieve aims to de-escalate ongoing trade tensions and provide a window for further negotiations.
Investors responded positively to the news, with significant gains observed in technology and retail sectors. Companies like Amazon and Apple saw their stock prices rise by over 8%, while Nike and Best Buy also reported notable increases.
Despite the market rally, analysts caution that the truce is temporary and underlying issues remain unresolved. Concerns persist regarding the long-term impact of tariffs on global supply chains and economic growth. Treasury Secretary Scott Bessent emphasized the need for continued negotiations to achieve a more comprehensive trade agreement.
The 90-day period is expected to be a critical time for both nations to address deeper trade disputes and work towards a sustainable resolution.
