Wall Street kicked off the week with a powerful surge as news broke of a 90-day pause in the U.S.–China trade dispute. Investor relief and renewed economic optimism drove the Dow Jones Industrial Average to soar over 1,000 points, gaining 2.8%, while the S&P 500 jumped 3.3%.
The rally followed a breakthrough in weekend talks in Geneva, where both nations agreed to temporarily scale back their punishing tariffs. U.S. tariffs on Chinese imports will drop from 145% to 30%, while China’s tariffs on American goods will fall from 125% to just 10%. The agreement is a much-needed reprieve for businesses, many of which had frozen shipments to avoid exorbitant costs.
Traffic at key trade hubs like the Port of Los Angeles had plummeted by over a third compared to last year, heightening fears of supply chain disruptions and product shortages. The tariff reduction offers a glimmer of hope to importers and exporters alike—and brings some breathing room to global markets.
While analysts at Yale’s Budget Lab caution that inflation and slower growth remain on the horizon, they also note the reduced tariffs may generate more revenue than the earlier, harsher levies. With trade flowing again, more importers are expected to pay the lower fees rather than sit on the sidelines.
The tariff relief, however, is temporary, and much remains uncertain as negotiations continue. But for now, markets are celebrating the thaw in trade tensions—and businesses are getting back to work.