Tue May 13 02:37:48 UTC 2025: ## US-China Trade War Sees 90-Day Truce, Sending Global Markets Soaring

**NEW YORK, May 13, 2025** – A 90-day truce in the US-China trade war sent shockwaves of optimism through global markets Monday, May 12, 2025. Both nations agreed to temporarily roll back most tariffs, averting a potential recession and widespread shortages.

The announcement sparked a massive rally on Wall Street. The S&P 500 surged 3.3%, nearing its all-time high, while the Dow Jones Industrial Average jumped 1,160 points (2.8%) and the Nasdaq composite climbed 4.3%. This follows a period of significant market downturn fueled by previous tariff increases.

The positive sentiment extended beyond stocks. Crude oil prices rose on expectations of increased global fuel consumption, the US dollar strengthened, and Treasury yields jumped as the likelihood of Federal Reserve interest rate cuts decreased. Gold prices fell, reflecting reduced investor demand for safe haven assets.

Analysts predict the truce could boost US economic growth by 0.4% this year, a significant contribution given the 0.3% contraction in the first quarter. The agreement includes US tariff reductions on Chinese goods to 30% from as high as 145%, and similar reductions from China.

While the 90-day pause provides relief, particularly for retailers preparing for back-to-school and holiday seasons, experts caution that significant challenges remain in ongoing negotiations. The agreement comes on the heels of a separate US-UK trade deal, also aiming to reduce tariffs.

The market rally was broad-based, with gains seen in sectors heavily impacted by tariffs, including apparel (Lululemon +8.7%, Nike +7.3%), retail (Best Buy +6.6%, Amazon +8.1%), and travel (Carnival +9.6%, Delta Air Lines +5.8%). Smaller companies, more vulnerable to economic shifts, also saw significant gains (Russell 2000 index +3.4%).

Positive sentiment extended to European and Asian markets, although gains were less pronounced than in the US. The yield on the 10-year Treasury note increased, reflecting reduced expectations for Fed intervention. Market analysts now anticipate only two interest rate cuts this year. While the truce offers a temporary reprieve, the long-term outcome of US-China trade relations remains uncertain.

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