Since US President Donald Trump announced the Liberation Day tariffs, Wall Street jolted with highs and lows due to uncertainty brought by the US-China trade war. On 11 May, both countries announced that a trade deal was underway. The US  Treasury Secretary Scott Bessent declared the ongoing talks “substantial progress,” while Chinese Vice Premier He Lifeng called them

“candid, in-depth and constructive.”

According to CNBC, both countries have now agreed to suspend most tariffs on each other’s goods. It also announced that the reciprocal tariffs between the two economic giants will be cut from 125% to 10%. However, the US′ 20% duties on Chinese imports relating to fentanyl will remain in place, meaning total tariffs on China stand at 30%.

Market Forecasted Positive Indicators

As the news of a potential trade deal with amicable conditions broke out, the Wall Street graph went high with a strong forecast at 11:20 p.m. ET on Sunday. According to Ed Yardeni, a notable market analyst

“The stock market seems to have discounted the apparent simmering down of geopolitical tensions.” 

S&P 500

The US-China trade deal talks accelerated the S&P graph and recovered it to nearly the pre-tariff level. S&P 500 futures +1.4% at 5,756.25 on Sunday. 

Dow Jones

Dow Jones also marked a positive sign, and futures +415 points or 1% at 41,738.00.

Nasdaq 100 

Similar to other Wall Street indicators, Nasdaq 100 futures +2% at 20,529.25. 

Although the US stock market overwhelmingly welcomed the US-China trade deal talks,  analysts at Nomura cautioned that there is a huge scope for disappointment if there is no significant reduction in Chinese tariffs. 

US-China Geneva Talks 

US-China trade deal talks are underway in Geneva, Switzerland. After the first day of talks, President Trump praised a ‘total reset’ of the relationship between the two countries. Last week, the US and UK broke a deal in which the 25% tariffs were cut to 10% for a maximum of 100,000 UK cars, matching the number of cars the UK exported last year. There are chances that a similar reciprocal agreement could be reached between the US and China, as both countries have suspended tariffs for 90 days.