The global stock market and the U.S. dollar surged on Monday as gold prices declined following the U.S. and Chinese officials’ pledge to slash reciprocal tariffs, easing trade war fears in markets globally.
Following weekend talks in Geneva, a joint U.S.-China statement on Monday said that both sides would drop trade tariffs imposed since U.S. President Donald Trump’s April 2 announcement. U.S. Treasury Secretary Scott Bessent said the two sides had agreed on a 90-day pause on measures and that tariffs would come down by over 100 percentage points to a 10 percent baseline rate.
Following the news, the U.S. dollar index rose 1.14 percent to 101.48 and Wall Street stocks rallied, easing concerns about a downturn triggered last month by U.S. President Donald Trump’s escalation of tariff measures aimed at narrowing the U.S. trade deficit.
Global stocks rise
Wall Street’s S&P 500 futures were 2.78 percent higher, and contracts following the Nasdaq 100 index gained 3.8 percent, setting the index up for its best trading day in more than a month.
In the Asian stock market, Hong Kong’s Hang Seng TECH Index also gained 5.16 percent. China’s CSI 300 Index gained 1.16 percent while Japan’s Nikkei rose 0.38 percent. South Korea’s KOSPI Index rose 1.17 percent to 2,607.33, while MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.75 percent.
In the European stock market, Germany’s DAX share index rose 1.22 percent after reaching a record high in early trading, the regional STOXX 600 gained 1.12 percent and Italy’s FTSE MIB gained more than 2 percent, reaching its highest since 2007.
“Both countries represented their national interest very well,” U.S. Treasury Secretary Scott Bessent said after talks with Chinese officials in Geneva. “We both have an interest in balanced trade, the U.S. will continue moving towards that,” he added.
The Geneva meetings were the first face-to-face interactions between senior U.S. and Chinese economic officials since Trump returned to office and launched global tariffs last month, imposing particularly heavy duties on China. Bessent said the deal did not include sector-specific tariffs and that the U.S. would continue strategic rebalancing in areas including medicines, semiconductors and steel where it had identified supply chain vulnerabilities.
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Easing geopolitical tensions support rally
Stock markets globally had already recovered to the levels where they traded ahead of Trump’s April 2 tariff announcement before Monday’s statement. An easing in geopolitical tensions also boosted sentiment further boosted the mood, as the ceasefire between India and Pakistan held. In addition, Ukrainian President Volodymyr Zelenskiy said he was ready to meet Vladimir Putin in Turkey on Thursday for talks.
Following the U.S.-China trade deal announcement, spot gold fell 3.27 percent to $3,217.62, while U.S. gold futures dipped 3.76 percent to $3,218.29. On the other hand, oil prices surged, with Brent gaining 2.85 percent and WTI futures rising 3.05 percent.
