Dow Futures Jump Over 1,000 Points As US-China Agree To Slash Tariffs For 90 Days

The combined 145% tariffs on most Chinese imports will be reduced to 30%, while China’s tariffs on U.S. imports will decrease to 10%.

U.S. stock futures surged in early trade on Monday after the U.S. and China announced that they have agreed to pause most tariffs for the next 90 days while further trade talks take place.

Futures linked to the Dow Jones Industrial Average gained over 1,000 points, or 2.4%, while S&P 500 futures rose 3.15% and Nasdaq-100 futures gained over 4%.

The SPDR S&P 500 ETF Trust (SPY) was up over 3%, the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, was 3.95% higher, and the SPDR Dow Jones Industrial Average ETF (DIA) rose 2.38% in pre-market trade.

According to a joint statement by the U.S. and China, President Donald Trump’s ‘Liberation Day’ reciprocal tariffs on China will be slashed to 10% from 125%. However, the other 20% tariff on what the President describes as China’s role in the fentanyl trade will also remain.

The combined 145% tariffs on most Chinese imports will be reduced to 30% overall. 

Meanwhile, China’s tariffs on U.S. imports will decrease to 10%.

“We are in agreement that neither side wants to decouple,” Treasury Secretary Scott Bessent said on Monday. “We would like to see China open to more U.S. goods.” 

“We expect that as the negotiations proceed, that there will also be the possibility of purchase agreements to pull what is our largest bilateral trade deficit into balance,” he stated.

Bessent added that the tariff reductions don’t apply to sector-specific duties imposed on all U.S. trading partners, and the tariffs applied on China during the first Trump administration remain in place. When asked what would happen at the end of 90 days to avoid tariffs from going back up, Bessent indicated there’s a chance to extend the truce further.

Bitcoin’s (BTC) price crossed $105,500 in U.S. pre-market hours before returning to $104,500.

Crude oil prices rose 3.9% to trade above $62 a barrel. 

While the broader stock market rallied, gold prices (XAUUSD) were down over 3%, trading at $3,220.

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