The United States and China have agreed to a 90-day tariff truce, slashing tariffs by 115 percent while retaining a baseline 10 percent tariff. This agreement, reached on May 12, 2025, following talks in Geneva, aims to ease trade tensions and provide temporary relief to global markets and businesses. Wall Street responded positively to the news, with the S&P 500 climbing for a fifth consecutive day, closing up 0.7% on Friday. The index posted a strong weekly gain of 5.3%, bringing it within 3% of its all-time high set in February. The Dow Jones Industrial Average also rose, gaining 331.99 points or 0.78% to close at 42,654.74, while the Nasdaq composite increased by 0.5%. Tech stocks, including Nvidia and Tesla, surged double digits during the week. Despite the market's optimism, concerns remain about the broader economic impact of the trade war. Consumer sentiment has deteriorated, with expectations for inflation rising to 7.3% over the next year, up from 6.5% the previous month. This could potentially lead to a cycle of higher inflation expectations and spending adjustments by households and businesses.
The market rebound has been truly historic: The S&P 500 has risen +17.2% over the last 6 weeks, marking the sharpest 6-week gain since 2020. At the same time, the Nasdaq 100 has rallied +23.2%, also the biggest increase since 2020. Over the past week, the S&P 500 gained +5.3%, https://t.co/NBUki4fWz2
"The U.S. and China narrowly avoided a trade war by agreeing to a 90-day pause on steep tariffs. The truce is not a bona fide trade deal, but the stage is now set for serious negotiations," writes CFR President Michael Froman. https://t.co/bJmqd8P9dA
🟢 #EEUU y #China pactan tregua en su guerra arancelaria Las dos mayores economías del mundo aplazan por 90 días la aplicación de aranceles, Trump reconquista aliados en el Golfo, y otras noticias relevantes de la semana. https://t.co/SSMeq7ik8Q