Markets erupted in a wave of optimism this week after the Trump administration and Beijing unveiled a surprise trade deal that will slash reciprocal tariffs from over 100% to just 10%, dramatically altering the landscape for international trade and investor sentiment—at least for the next 90 days.
Dubbed by some strategists as a “dream scenario,” the agreement has been hailed as “better than expected” by financial analysts worldwide and is already delivering rippling gains across global markets.
From Frankfurt to Hong Kong to Wall Street, the market response was immediate and robust. Europe’s Stoxx 600 rose 1%, Germany’s DAX hit a one-year high, and Hong Kong shares surged by 3%. In the U.S., Nasdaq futures jumped 3.8%, with the S&P 500 up 2.8% and the Dow climbing 3.1%, setting the tone for a potentially bullish streak heading into summer.
Analysts at JPMorgan, Deutsche Bank, Barclays, and Mizuho described the tariff truce as a sharp reversal from the protectionist tone that has dominated trade policy since early April. The deal, announced from Geneva, is expected to reignite risk appetite, ease pressure on the Federal Reserve, and re-open trade lanes that had slowed under the weight of tit-for-tat duties.
Under the new agreement:
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Reciprocal tariffs will drop to 10%, down from effective rates exceeding 100%.
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The U.S. will maintain 20% fentanyl-related tariffs, leaving the total average American tariff rate at 30% during the 90-day pause.
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China’s effective tariff rate drops from 108.8% to 27%, dramatically exceeding the 50–60% reduction markets had priced in.
According to Tai Hui of JPMorgan Asset Management, the magnitude of this reduction is “larger than expected,” though he cautioned that a permanent deal in 90 days is unlikely. Still, the short-term benefits are obvious: “Markets are back in risk-on mode,” Hui said.
Shipping stocks soared—Maersk rose 12%—as traders anticipate a rebound in global freight and inventory build-ups in anticipation of potential long-term deals. Companies are expected to front-load exports and imports while tariff relief is in effect, raising demand for containers and port capacity.
In the tech sector, analyst Dan Ives of Wedbush was especially bullish, forecasting that the new trade environment could lead to “new highs in 2025” for U.S. tech giants. He called the result “massive” and “clearly just the start of broader and more comprehensive negotiations.”
Meanwhile, the U.S. dollar index rose 1%, and Treasury yields ticked higher—signs that investor confidence in American assets is stabilizing. Mizuho’s Jordan Rochester noted that the so-called “Sell America” narrative had been sharply reversed.
