Nasdaq 100 Enters Bull Market off of US-China Truce – US Market Wrap

Wall Street’s bets that the US-China trade truce would end an all-out tariff war boosted the S&P 500 by more than 3%, while defensive markets such as bonds, gold, and haven currencies fell. The dollar had its best day since November.

The stock benchmark rose above Donald Trump’s April 2 “Liberation Day” level, owing to a rebound in risk appetite and lower expectations of a recession. A surge in big tech stocks propelled the Nasdaq 100 back into a bull market just a month after falling 20% from its previous high. Treasury yields rose amid a possible reset in inflation expectations, as traders reduced their Federal Reserve bets to just two rate cuts in 2025.

For large investors who were forced to take defensive measures at the height of April’s chaos, the market’s rapid recovery has been a mixed blessing. Shorting the dollar, increasing stock volatility, and betting on multiple Fed rate cuts were among the most popular trades in mid-April. Each has taken severe lumps. Their unwinding could be fuelling the recovery.

The United States and China will temporarily lower tariffs on each other’s products, giving the world’s two largest economies three months to work out a more comprehensive agreement. As he announced a de-escalation of his trade war with Beijing, Trump stated that China had agreed to remove non-tariff barriers to US imports, implying that even greater concessions could be forthcoming if talks continue.

The S&P 500 has breached its key 200-day moving average. The Nasdaq 100 advanced 4%. The Dow Jones Industrial Average gained 2.8%. Amazon drove megacaps higher. Trump claimed he spoke with Apple’s Tim Cook just as the iPhone maker was rumoured to be considering price increases. Drugmakers rose on bets that they had avoided the worst-case scenario as Trump pursued price cuts.
The two-year yield rose 11 basis points to approximately 4%. The dollar gained 1%.