US, China Slash Tariffs, Boost Global Stocks

U.S. and China have agreed to a significant 90-day reduction in tariffs, with the U.S. cutting tariffs on Chinese goods from 145% to 30% and China lowering tariffs on U.S. imports from 125% to 10%, sparking a surge in U.S. stock markets. The Dow Jones rose over 1,000 points, the S&P 500 increased about 3%, and the Nasdaq jumped nearly 4%, driven by strong gains in technology and consumer discretionary sectors, including major companies like Apple, Amazon, Tesla, and Nvidia. This tariff rollback has eased fears of a U.S. recession and led to increased investor confidence, with markets viewing the move as a step toward de-escalating trade tensions and potentially establishing a longer-term deal. The reduction in tariffs has also influenced expectations around Federal Reserve interest rate decisions, with a decreased likelihood of rate cuts due to inflation concerns. However, some trade tensions and sectoral tariffs remain, and certain sectors like pharmaceuticals declined after President Trump announced plans to cut prescription drug prices. Overall, the market reaction has been overwhelmingly positive, reflecting optimism that the economic damage from previous tariffs may be limited.