In a remarkable turnaround for Wall Street, the Nasdaq 100 soared more than 4% on Monday, entering bull market territory just weeks after plunging into a bear market amid escalating trade tensions.
The dramatic rally came after US and Chinese officials announced a breakthrough agreement following weekend negotiations in Geneva, Switzerland. The deal will temporarily reduce US tariffs on Chinese imports from 145% to 30%, while China will cut its retaliatory duties from 125% to 10% for an initial 90-day period.
"Markets are rallying because investors are surprised with the velocity of the Chinese trade tariff deal progress," said Jeff Kilburg, CEO of KKM Financial, as quoted by CNBC. The agreement effectively ends what Treasury Secretary Scott Bessent had previously described as a "trade embargo" between the world's two largest economies.
Technology stocks, particularly those with significant exposure to China, led Monday's rally. Companies like Tesla jumped nearly 7%, while Apple and Nvidia gained 6% and 5% respectively. Other tech-dependent retailers saw even larger gains, with Amazon advancing more than 8%.
The Nasdaq's recovery has been swift and decisive. After entering bear market territory on April 4 – down more than 20% from its previous record – the index has now rebounded over 20% from its lowest point, officially marking a new bull market. This rapid turnaround highlights the tech sector's resilience despite ongoing economic uncertainties.
The broader market also celebrated the trade truce, with the S&P 500 climbing 3.26% to 5,844.19 and the Dow Jones Industrial Average surging 1,160 points to close at 42,410.10. Both indexes have now erased their losses since Trump's April 2 "Liberation Day" tariff announcement, which had initially triggered recession fears.
While the current agreement is temporary, Treasury Secretary Bessent indicated that further negotiations are planned. "I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement," Bessent told CNBC, suggesting this could be the first step toward a more comprehensive trade deal between the two economic superpowers.