United States equity markets posted large gains on Monday (Tuesday AEST), closing at fresh multi-week highs after Washington and Beijing reached a temporary agreement to lower tariffs, fuelling optimism that a broader trade accord may be within reach and easing fears of a global economic slowdown.
The Dow Jones Industrial Average jumped 1,160.7 points, or 2.8%, to close at 42,410.1. The S&P 500 climbed 3.3% to finish at 5,844.2, while the Nasdaq Composite led gains with a 4.4% surge to 18,708.3.
Investor sentiment was lifted after Treasury Secretary Scott Bessent confirmed that talks with Chinese officials in Switzerland over the weekend had been "very productive".
As part of the agreement, the U.S. reduced tariffs on Chinese imports to 30%, while China cut duties on U.S. goods to 10%.
Speaking on CNBC’s Squawk Box, Bessent said he anticipates resuming discussions with Beijing in the next few weeks to negotiate a more comprehensive trade framework.
The positive trade developments boosted shares of major multinational companies with heavy exposure to Chinese trade. Tesla rallied nearly 6.8%, Apple added 6.2%, and Nvidia rose 5.4%.
Retailers and hardware firms also benefitted, with Best Buy gaining 6.6%, Dell Technologies up 7.8%, and Amazon advancing 8.1%.
On the bond markets, the yield on the 10-year Treasury note rose 2.1% to 4.473%, while the 2-year yield climbed 3.2% to 4.012%.
