Stocks Surge After US & China Agreed To Slash Tariffs: Closing Bell
May 12, 2025
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5:32Carnival Refinances More Debt, NRG Energy Deal, Cigna Drops | Stock Movers
9:46Now PlayingStocks Surge After US & China Agreed To Slash Tariffs: Closing Bell
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as posted by the channelWatch comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Alix Steel, Scarlet Fu, Carol Massar and Matt Miller.
Wall Street’s bets that the US-China trade truce marked the end to an all-out tariff war drove the S&P 500 up over 3%, while sinking defensive corners of the market from bonds to gold and haven currencies. The dollar climbed the most since its November post-election rally.
The rebound in risk appetite and diminished expectations of a recession drove the stock benchmark above Donald Trump’s April 2 “Liberation Day” level. A surge in big techs drove the Nasdaq 100 back into a bull market just about a month after it plunged 20% from a previous record. Amid a potential reset in inflation expectations, Treasury yields climbed as traders lowered their Federal Reserve wagers to just two rate cuts in 2025.
For big investors shocked into defensive measures at the height of April’s chaos, the swift recovery in markets has been a mixed blessing. Shorting the dollar, going long stock volatility and piling on bets premised on multiple Fed rate cuts were among the most popular trades in mid-April. Each has taken severe lumps. Indeed, their unwinding may be adding fuel to the bounce-back.
The US and China will temporarily lower tariffs on each other’s products, buying the world’s two largest economies three months to work toward a broader agreement. Trump said China had agreed to remove non-tariff barriers to US imports as he announced a deescalation of his trade war with Beijing, suggesting even greater concessions could be in store if talks progress.
“No one had these low China tariff rates on their bingo cards. This is a big positive surprise,” said Jeff Buchbinder at LPL Financial. “Risk remains that tariffs go back up from current levels as the pauses end, though taking worst-case scenarios off the table is reassuring.”
The S&P 500 breached its key 200-day moving average. The Nasdaq 100 rallied 4%. The Dow Jones Industrial Average added 2.8%. Amazon.com Inc. led megacaps higher. Trump said he spoke with Apple Inc.’s Tim Cook just as the iPhone maker was reported to be considering price hikes. Drugmakers rose on bets they averted the worst-case scenario as Trump targets price cuts.
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