The impact of a real tariff deal on stock markets
According to the analysis and translation group of the Stock Information and Education Company and quoted by Business Insider, investors on Wall Street began their trading with considerable optimism and major stock indexes reached their highest levels on record at the end of the day. The S&P 500 index crossed the 6,800 mark for the first time, the Dow Jones Industrial Average rose by 337 points to 47,544, and the Nasdaq Composite also recorded a jump of 1.86%.
The yield on the 10-year Treasury note also rose, a sign of the return of risk appetite among investors. The movements showed that the markets have welcomed the temporary end of the tariff war, although some analysts warn that the current optimism may be excessive.
During US President Donald Trump's Asian trip, he announced before an official meeting with Chinese President Xi Jinping that the two countries are on track to reach a major agreement. According to US Treasury Secretary Scott Besant, the agreement could prevent the imposition of 100% tariffs on some rare earth minerals, which Trump had previously threatened to impose in response to China’s export restrictions.
Many market participants believe that the temporary agreement could provide a new opportunity for US technology companies to maintain their hold on the Chinese market. However, analysts such as Joe Mazzola, head of trading strategy at Charles Schwab, have warned that any negative news or signs of a breakdown in the agreement could quickly send Wall Street into a downward spiral; as on October 10 of this year, similar concerns caused the indices to fall 3%.
According to Bloomberg data, the market was also on an upward trend before the agreement was announced after the publication of a weak inflation report in September, and the news of the ceasefire only strengthened this trend. The daily gains signaled a return to short-term confidence in the stock market after months of worries about a recession and tariff damage.
With the threat of restrictions on high-tech sales to China receding, investors flocked to semiconductor stocks. Nvidia led the charge, jumping 3 percent, while AMD and Broadcom also rose significantly. Qualcomm also jumped after announcing it would enter the artificial intelligence race to develop chips that rival Nvidia. The reaction suggests the tech market is the first potential winner of the trade truce.
By contrast, shares in companies active in rare earths fell. The recent deal allows China to delay implementing export restrictions on these elements, bad news for American miners. The price declines were another reminder of the reliance on global supply chains for emerging industries, from electric cars to advanced chips.
The gold market was also not left out of the deal. While gold had been a safe haven in recent weeks, the easing of tensions has reduced its appeal. The price of gold fell 3%, returning to below $4,000 per ounce; a natural correction after this year’s record highs, indicating a decline in public fear in the market.
Finally, with the return of risk appetite, the yield on the 10-year US Treasury bond also rose. Investors shifted some of their assets from fixed-income securities to stocks, a move that usually reflects expectations for economic growth and controlled inflation.
In general, the trade ceasefire between Washington and Beijing managed to inject a positive and psychological mood into global markets in the short term. However, experts warn that this reaction is more emotional and temporary than structural and sustainable. To continue the upward trend, the United States must avoid sudden decisions and contradictory statements in the area of tariffs, as any sign of a return to confrontational policies could destroy all this optimism in a matter of hours.