Stock Market Today: Markets Surge on US-China Tariff Truce, Dow Soars Over 900 Points

Stocks rose Monday morning after the U.S.-China trade truce soothed previous concerns. The Dow Jones Industrial Average (DJI) surged 894 points, or 2.17%, while the S&P 500 (GSPC) jumped 2.59%. The Nasdaq Composite (IXIC) led the way with a 3.70% gain, boosted by a rebound in technology stocks previously battered by trade tensions.

The sharp rally comes on the heels of a 90-day agreement between the US and China to pause reciprocal tariffs. Under the deal, the US will lower tariffs on most Chinese imports from 145% to 30%, while China will cut duties on US goods from 125% to 10%. The sweeping reductions exceeded expectations and unleashed a wave of risk-on sentiment across equity markets.

Market Movers:

• Apple (AAPL) +3.2%: Shares rose after reports emerged that the company is nearing a deal to integrate AI features from OpenAI into its next iPhone software update. Investors are optimistic that a ChatGPT-powered Siri could reignite consumer interest and boost upgrade cycles. Analysts see the move as an effort to compete with Google and Samsung’s AI-enabled devices. The announcement is expected at Apple’s WWDC event next month.
• Nvidia (NVDA) +4.5%: Nvidia rose to a new all-time high ahead of its earnings report later this week. Investor enthusiasm remains strong around the chipmaker's dominance in the AI space. Analysts are forecasting another quarter of blowout data center revenue. Some traders also cited short covering as a driver of Monday’s momentum.
• Tesla (TSLA) -2.1%: Shares dipped following a report that its EV sales in China dropped 18% year-over-year in April. Slowing demand and rising competition from local automakers like BYD weighed on sentiment. Additionally, CEO Elon Musk's recent focus on AI and robotics has raised concerns that core auto operations may be taking a back seat. The stock has now erased most of last week’s gains.
• GameStop (GME) +74.4%: Shares soared after Reddit trader “Roaring Kitty” returned to social media with a cryptic post, sparking a fresh meme stock rally. The move revived memories of the 2021 short squeeze, prompting a surge in retail trading volume. GameStop did not release any fundamental news, but the frenzy pushed the stock into multiple volatility halts. Analysts warn the spike is likely unsustainable and disconnected from the company’s earnings outlook.

Trade Truce Sparks Global Risk Rally

Markets welcomed news of the temporary US-China trade ceasefire, viewing it as a critical de-escalation of economic tensions. While the deal is only valid for 90 days, its scope — a combined 115 percentage point reduction in tariffs — surprised analysts and triggered short covering in both stocks and commodities. Investors are hopeful that the pause will allow space for a more durable agreement to be forged. President Trump hinted that a longer-term opening of China to US businesses is in progress, though he cautioned that formalizing such terms could take time.

Pharma Stocks Get Lift from Executive Order

President Trump also signed an executive order Monday aimed at slashing US drug prices by up to 90%. The move is expected to raise drug costs in foreign markets, a potential boon for pharmaceutical companies that rely on international revenue. While the broader healthcare sector was mixed, large-cap pharma names saw modest gains on the back of expected overseas pricing power.

The announcement also added to the day's bullish tone, reinforcing Trump’s dual message of economic nationalism and market support. Investors interpreted the move as a sign that the administration is pursuing policies that could increase domestic margins for key industries.

Oil Rallies as Traders Bet on Rebounding Demand

Crude oil prices surged over 2% on Monday, with West Texas Intermediate (CL=F) hovering near $62.50 per barrel. The trade truce revived hopes that demand for energy will remain strong as the threat of a prolonged global slowdown recedes. Short-covering activity further boosted the rally, as traders scrambled to unwind bearish bets on crude amid shifting sentiment.

Commodities broadly benefited from the news, with both oil and industrial metals catching a bid. Analysts say the 90-day tariff pause gives breathing room to cyclical sectors and could encourage more capital inflows if inflation remains tame.

Looking Ahead

While Monday’s rally showed a reversal from recent turbulence, uncertainty still lingers. A 90-day window is brief, and the underlying issues in US-China relations — intellectual property, subsidies, and trade imbalances — remain unresolved. All eyes will now turn to Tuesday’s release of April CPI data, followed by retail sales and PPI later in the week. These reports will give the first concrete look at how tariffs may be affecting consumer prices and business input costs.