Stock Market Soars On U.S.-China Tariff Thaw Sparking Almost $700 Billion Big Tech Rally
3 minute readPublished: Monday, May 12, 2025 at 1:48 pm
**Stock Market Surges as US-China Trade Tensions Ease, Tech Giants Lead the Rally**
The stock market experienced a significant surge on Monday, fueled by a de-escalation in the ongoing trade war between the United States and China. Following weekend talks in Geneva, both countries agreed to reduce tariffs for at least the next 90 days. The U.S. slashed its duties on Chinese goods from 145% to 30%, while China cut its levies on U.S. goods from 125% to 10%.
This "dream scenario" for investors, as described by Wedbush analyst Dan Ives, sparked a broad rally across global markets. The Hang Seng Index in Hong Kong jumped 3%, and U.S. indexes followed suit. The Dow Jones Industrial Average soared 2.5% (1,000 points), the S&P 500 rose 2.8%, and the tech-heavy Nasdaq surged 4%. These gains pushed the Dow, S&P, and Nasdaq to their highest intraday levels since April and March.
Leading the charge were major tech companies, heavily reliant on the US-China relationship. Amazon saw an 8% increase, Apple rose 5%, Nvidia and Tesla each gained 6%, and Alphabet and Meta also saw significant gains. The combined market capitalization of these seven tech giants increased by approximately $670 billion on Monday, with Amazon contributing the largest portion at $170 billion.
As investors embraced riskier assets, safe-haven investments like gold struggled, with prices tumbling 3% to their lowest level since April. U.S. Treasury yields also spiked, reflecting a shift in investor sentiment.
The market's reaction highlights the sensitivity of the global economy to trade relations. The initial tariff announcements by the Trump administration in April caused a significant market downturn, and the recent easing of tensions has provided a much-needed boost.
BNN's Perspective: While the tariff reductions are undoubtedly positive news for the market and the tech sector, it's crucial to remember this is a temporary truce. The underlying issues in the US-China trade relationship remain. A sustainable resolution requires more than just a 90-day pause. The long-term impact will depend on the progress made in ongoing negotiations.
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