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Stocks have rallied this week after the US and China agreed to temporarily cut tariffs on each other's imports, marking a de-escalation in trade tensions.
US Treasury secretary Scott Bessent said on Monday morning that the US and China had agreed to lower their tariffs on each other's imports by 115% for 90 days, following negotiations in Switzerland.
The move lowers US reciprocal tariffs on Chinese goods from 145%, to 30% and cuts China's retaliatory duties from 125% to 10%.
Investor optimism around the agreement has eased economic concerns and driven markets higher throughout the week. The S&P 500 (^GSPC) is up 4.7% over the past five days, at the time of writing, while the tech-focused Nasdaq Composite (^IXIC) has advanced 6.8% in that time. The UK's FTSE 100 (^FTSE) is 1.2% in the green over the past five days and the pan-European STOXX 600 (^STOXX) is up 1.7%.
Wall Street opened higher on Friday, after president Donald Trump said that the US would unilaterally impose new tariff rates for a number of countries "over the next two to three weeks".
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Trump said his administration cannot negotiate trade deals with all countries at once due to limited capacity.
“I think we’re going to be very fair. But it’s not possible to meet the number of people that want to see us,” Trump said during a meeting with business executives in the United Arab Emirates.
While Monday's agreement marked a de-escalation in tensions between the US and China, the nature of a longer-term agreement is still uncertain.
Mark Williams, chief Asia economist at Capital Economics, said in a note on Monday that the "US still has much higher tariffs on China than on other countries and still appears to be trying to rally other countries to introduce restrictions of their own on trade with China. In these circumstances, there is no guarantee that the 90-day truce will give way to a lasting ceasefire."
Earlier in the week, we asked Yahoo Finance UK readers if they believed that the two countries would continue to make progress on trade talks. We received 215 votes, with 46% of respondents believing that they would, while 39% disagreed and 15% were undecided on the matter.
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