TMTPOST -- U.S. stock market on Monday soared after the Trump administration and China announced a 90-day truce in the trade war between the world’s top two economies.

Credit：Xinhua News Agency

Three U.S. market benchmarks logged their biggest daily gains since April 9. The S&P 500 advanced 3.26%, the Dow Jones Industrial Average popped 1,160.72 points, or 2.81%, setting their highest close since March 3 and March 26, respectively. The Nasdaq Composite finished 4.35% higher, jumping into a new bull market with a gain of more than 20% from its April low, driven by big tech stocks. Amazon.com,Inc. shares surged 8.1%, Meta Platforms, Inc. gained 7.9%, and Tesla Inc. and Apple added more than 6%.

 Chinese firms outperformed American stock market on Monday. The Nasdaq Golden Dragon China Index, which tracks 65 China-exposed U.S.-listed companies, settled 5.4% higher. The index hit its highest close since April 3, almost wiping out losses since U.S. President Donald Trump unveiled his sweeping reciprocal tariffs.

The American depositary receipts (ADRs) of Alibaba Group, the most valuable Chinese firm listed in U.S., jumped 5.8%, and two domestic peers --Temu parent PDD Holdings Inc. and JD.com rose over 6%. ADRs of GDS Holdings Ltd., Alibaba’s data center service supplier, climbed 14.5%. Fangdd Network Group Ltd., operator of a leading online real estate marketplace in China, gained 8.2%. Shares of Tesla’s Chinese rivals -- Xpeng, Nio and Li Auto climbed between 5.7% and 7.6%.

The stock market significantly bounced back as China and U.S. agreed to cut most of their recent tariffs, effectively declaring a 90-day trade truce.The tariff cuts are bigger than Wall Street expected, raising hopes of an end to a tit-for-tat tariff battle that had threatened a global economic recession.

The U.S. said it will lower reciprocal tariffs of 125% on Chinese goods to 10%, and a 20% tariff tied to the fentanyl crisis will remain. China said it will accordingly cut its tariffs on U.S. goods to 10% from 125%. China will also adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2. The two countries will also establish a mechanism to continue discussions about economic and trade relations, and the discussions may be conducted alternately in China and the United States, or a third country upon agreement of both sides.

“No one had these low China tariff rates on their bingo cards. This is a big positive surprise,” said Jeff Buchbinder, chief equity stategist at LPL Financial. “Risk remains that tariffs go back up from current levels as the pauses end, though taking worst-case scenarios off the table is reassuring.”

The deal,following a two-day China-U.S. high-level meeting on economic and trade affairs, ended up satifying nearly all of Beijing’s core demands,a Bloomerg report commented. It continued that the elevated “reciprocal” tariff for China has been suspended, leaving America’s top rival with the same 10% rate that applies to the UK, a longtime ally. Moreover,the two sides agreed to take “aggressive actions” to stem the flow of fentanyl, which could eventually lead to the elimination of the additional 20% tariff.

Many investors still remained cautious. Some noted tariffs overall remain at their highest levels in decades, far higher than expected at the start of Trump’s second term. Others said the on-again, off-again trade restrictions had already disrupted business plans and supply chains, damaging the economy and corporate profits.