US stock markets opened with a strong rally Monday morning as investors welcomed a surprise announcement from the United States and China suspending most of their tariff hikes for 90 days, in a move aimed at de-escalating trade tensions and giving space for further negotiations.As of 9:34 a.m. ET, the Dow Jones Industrial Average surged 959.9 points, or 2.33%, to 42,209.28 shortly after the open. The Nasdaq Composite soared 3.64%, adding 651.8 points to reach 18,580.72, driven by tech sector strength. The S&P 500 rose 2.61%, or 147.66 points, to 5,807.57.The market reaction came after a joint statement from Washington and Beijing announced the temporary suspension of most tariffs introduced during the prolonged trade war initiated under US President Donald Trump. The US agreed to slash tariffs on Chinese goods to 30% from highs of 145%, while China said it would reduce its tariffs on American imports to 10% from 125%. The agreement followed “substantial progress” during weekend talks in Geneva.Tech stocks led the rally, with American semiconductor companies—deeply reliant on Chinese supply chains—posting notable early gains. ON Semiconductor, Micron, and Broadcom each jumped between 6% and 8%, while Nvidia added 4.8%.Travel and consumer sectors also responded positively. Airlines such as American, Delta, and United each climbed about 7%, while cruise lines saw similar advances. Retail giants benefiting from lower import costs also rallied—Amazon surged 7.8%, and Best Buy leapt 10.4%.However, not all sectors joined the rally. Pharmaceutical giants came under pressure after President Trump announced a planned executive order to link Medicare drug reimbursements to international price benchmarks. Shares of Johnson & Johnson, Merck, and Pfizer fell around 3% in early trading.NRG Energy shares spiked over 9% after the company announced a $12 billion acquisition of natural gas facilities from LS Power, aiming to nearly double its generation capacity.In commodity markets, oil prices extended gains, buoyed by easing trade tensions and expectations of stronger global demand. US crude rose $2.15 or 3.52% to $63.17. However, gold slid $101.60 or 3.04% to $3,242.40 as investors rotated out of safe havens amid risk-on sentiment.The US 10-year Treasury yield ticked up to 4.457%, reflecting improved risk appetite. Meanwhile, the VIX volatility index fell sharply by 11.64% to 19.35, highlighting calmer investor sentiment.On the currency front, the euro weakened to $1.113, down from $1.1209, while the dollar jumped against the Japanese yen to 148.06.Global markets echoed Wall Street’s optimism. Hong Kong’s Hang Seng rallied 3%, while Europe saw more modest gains, with the CAC 40 in Paris up 1.3%, Germany’s DAX ahead by 0.3%, and London’s FTSE 100 climbing 0.5%.In Asia, sentiment was further lifted by a ceasefire between India and Pakistan. India’s Sensex surged 3.2%, while Pakistan’s KSE 100 jumped over 9%, triggering a temporary trading halt.While the 90-day truce marks a significant de-escalation, analysts caution that deep differences remain between the two economic powers, and the coming negotiations will be closely watched.
