S&P 500 Soars as US, China to Slash Tariffs in 90-Day Reprieve
US stocks rallied Monday (12/05), with everything from Big Tech to retail and travel shares advancing after Washington and Beijing agreed to temporarily suspend most tariffs on each other’s goods, boosting investor optimism on the global economy and corporate profits.
The S&P 500 Index rallied 2.7% as of 9:34 a.m. in New York, on track for its best session since April 9 to put it on course to close above where it stood on April 2, when President Donald Trump first announced his tariff blitz. The Nasdaq 100 Index jumped 3.4%, nearly erasing its year-to-date drop and was on track to re-enter a bull market, with Nvidia Corp., Amazon.com Inc. and Meta Platforms Inc. all rising. Apple Inc., which does much of its manufacturing in China, and Tesla Inc., which generates a substantial portion of its sales in China, both jumped more than 5%.
Traders bought into the riskiest parts of the stock market after Treasury Secretary Scott Bessent hailed the trade discussions as “very robust and productive” while further negotiations between the world’s two largest economies continue, with the small-capitalization Russell 2000 Index leaping 3.8%. A Goldman Sachs basket of unprofitable tech companies, which includes firms like Roku Inc. and Peloton Interactive Inc., gained 4.9% while the most shorted companies jumped 5.7%.
Travel and consumer companies with large China exposure also climbed. Nike Inc. soared 7.8% while Estee Lauder Companies Inc. climbed 9.7%. Dollar Tree Inc., Wayfair Inc., Under Armour Inc. and Foot Locker Inc. all advanced. US airlines rose, with Delta Air Lines Inc., United Airlines Holdings Inc. and American Airlines Group Inc. all higher while cruise stocks also advanced, led by gains in Royal Caribbean Cruises Ltd., Carnival Corp. and Norwegian Cruise Line Holdings.
“Investors and money managers are taking the worst case recession scenarios from the trade war off the table,” said Thomas Martin, said senior portfolio manager at Globalt Investments. “We’ll see how this goes over the coming weeks, but trade developments are certainly moving in the right direction.”
Source: Bloomberg
