Dow sets himself by 1,000 points after Trump's team and China dramatically lowered tariffs

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The US shares rose on Monday, after President Donald Trump's top trading officer had conveyed a surprisingly dramatic de-escalation in the trade voltages with China over the weekend and the tariffs dropped to a much lower level, which could say some economists that they could give up a US recession.

The Dow rose by more than 1,000 points or 2.5%. The wider S&P 500 was 2.85% higher, and the technical driving NASDAQ composite to 4%.

The US shares should extinguish all their losses since Trump's trade announcement of the “liberation day” for April 2, which has a tariff from 10% to practically all goods achieved and has achieved significantly higher tariffs for dozens of countries. Trump held most of these tariffs just a few days after their entry into force, increased import taxes on China, ultimately 145% in most Chinese imports.

In return, China increased the tariffs to US goods to 125%. The tit-for-tat trade war had effectively stopped trading between the two countries, which risked essential price increases and deficiency.

Trump and Finance Minister Scott Bessent had both said in the past few weeks that the tariffs in China had not become sustainable and that relaxation was necessary. Few believed that the result of the discussions between Bessent, the US sales representative Jamieson Greer and her Chinese colleagues in Geneva would be very important this weekend.

Both sides approved ax tariffs by 115 percentage points and still left the taxes considerably higher than where they competed in January, but much, much, much lower than the historical level in the past month, which was deeply concerned about American companies, consumers, economists and investors.

Another key element of the discussions: Besser said that the USA and China had set up a mechanism to raise the tariffs against each other again, which indicates that the worst trade war was behind us.

“There are still many factors that indicate a (global) recession and the news from this morning about the tariffs of the lower US China adds them,” said Henry Allen, a strategist of Deutsche Bank, in a note to investors on Monday morning. “The resilience of the market itself makes a recession less likely by loosening up the financial conditions. And the political decision -makers also do not want a downturn or a market storm, as we have seen with the extension of the reversal of mutual tariffs by 90 days.”

As a result, Wall Street cheered on Monday morning. The investors showed a larger appetite for risky assets, including stocks. The US dollar rose by 1.2%compared to a currency basket. US oil that had fallen as an investor because they feared a demand vacuum due to a global recession induced by tariff rose by 3.4% to $ 63 per barrel. Brent Crude, the international benchmark, rose by 3.2% to $ 66 per barrel.

In contrast, investors sold save-haven assets such as gold, which fell 2.5%. US state bonds also fell and broadcast the 10-year return over 4.45%. Bond prices and delivers trade in opposite directions. Japan's yen fell by 1.5%.

The CBOE volatility index, the fear knife of Wall Street, has dropped 10% to the lowest level since the end of March. According to CNNS Fear and Greed Index, “greed” was the mood markets.

Tech shares were special winners: Despite a recently recorded hardware from tariffs in China, Tech was shaken due to the deeply intertwined relationship between American and Chinese technology sectors, especially in the trade war between the USA and China. Apple (AAPL) received 7%, Tesla (TSLA) rose by 7.7%, Nvidia (NVDA) rose by 5.1%, Amazon (AMZN) rose by 8%and Intel (IntC) rose by 4.1%on Monday morning.

Shares of luxury goods manufacturers who had fallen in the past few months have returned sharply: Hermes rose by 4%, Burberry rose by 6%and LVMH rose by 7%.

Car manufacturers also rose: Jeep and Chrysler Maker Stellantis (StLA) rose by 9%, General Motors (GM) rose by 4%and Ford (F) by 2%.

The US Finance Minister Scott Bessent on Monday morning described the de-escalation of the trade war, which he negotiated this weekend with his Chinese colleagues as hard but respectful.

“We were firm and moved forward,” Bessent told GENF CNBC. “We tried to identify common interest. We had a list of problems we tried to solve, and I think we did a good job.”

Bessent found that America was negotiating from a position of strength because China needs the United States to buy its products more than the United States rely on its goods exports in China. China's economy is in the middle of a real estate crisis and an emerging debt crisis on the ropes. Consumer expenses have fallen, as did the factory edition. This is a bad time for China to have a crippled trade war.

“I had seen what was going on in the Chinese economy. We can see what's going on with the programs in the USA,” said Bessent. “Here, too, we are the (commercial) deficitland.
Historically, the deficit is a country that has a better negotiating position. ”

But as the saying says, nobody wins in a trade war. The US consumer mood has fallen off a cliff in recent months when the inflation-tired Americans were concerned that the prospect of rising prices and lack. Prailions from China to the USA were stopped as well and the company in America was rattling. And investors had granted themselves to a recession because the economists said that the US economy could be hit particularly hard by the trade war.

Although the relaxation of Wall Street, consumers and companies is welcome, there is a remarkable shift for a Trump government that had declared a few days ago that the trading distance with China was necessary to restore the lost in America. Trump had said last week that Zero Trade had brought America into a stronger position with China because this meant that it no longer “lost money against the Chinese”.

Bessent said that the deal was not a great shift in political shift.

“This is just a break,” he said. “The tariff level on April 2 for China was 34%, so we reduced it from 34%to 10%.”

As the next step in the negotiation, the United States will concentrate on expanding its supply chains for what improperly described as “strategic necessities” and reduces trust in China for things such as critical medication, semiconductor chips and steel.

“What we want is decoupling for strategic necessities that we could not get during Covid,” he said. “And we have found that efficient supply chains were not resilient supply chains. So we will create our own.”

He also said that the United States would look for a fairer approach to international business. Bessent said that the Trump government wanted “insidious, non-tariff commercial barriers in other countries that hurt American companies who are trying to do business”.

The trade war discalation with China is a great victory for the US economy and the American consumer, Kevin Hassett, director of the United States National Economic Council, told Kate Bolduan von CNN on Monday.

Hassett said that Trump had achieved great concessions from China and the United Kingdom in her respective recent framework conditions for trade negotiations, which have been announced in the past few days, especially by opening the British market for American beef and possibly reseting some of the barriers that were working on American companies that were working there after shops. And Hassett suggested that the agreement made over the weekend should prevent further problems with offer shocks from China.

“A lot of it is now cleared – the potential for pension disorders from China,” said Hassett. “I think it's really a very historical fresh start in the relationship between the USA and China.”

But Hassett said that the latest turn of events was not a contradiction to Trump's previous politics.

“The conclusion was what President Trump said that we would be okay if we didn't work out this good business,” said Hassett. “The fact is that we practically didn't sell anything to China. We buy a lot of things from China. We could buy this stuff from other countries or do it ourselves.”