The global market felt ripples of relief as Washington and Beijing reached a breakthrough on Monday, agreeing to pause the bulk of reciprocal tariffs that had upended trade flows, pressured corporate earnings, and rattled investor confidence in recent months.
The immediate response came from the equity markets, and nowhere was the reaction more pronounced than in technology and semiconductor stocks, sectors previously caught in the crossfire of escalating trade tensions.
Chipmakers roared back. U.S. semiconductor leaders like Nvidia and AMD climbed between 4% and 5% in premarket trading. Qualcomm and Broadcom weren’t far behind. Marvell Technology led the early gains, jumping over 7.5%, after the company postponed its investor day last week amid macroeconomic uncertainties that now seem slightly less threatening.
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Across the Pacific, Taiwan Semiconductor Manufacturing Co., the world’s largest chip foundry, surged nearly 4% in U.S. premarket hours. European counterparts joined the rally. ASML, a Dutch firm essential to advanced chip manufacturing, rose 4.5%, while Germany’s Infineon Technologies also climbed on the easing of cross-border tensions.
The trade ceasefire follows weekend talks in Switzerland between U.S. Treasury Secretary Scott Bessent and Chinese trade officials—talks Bessent described as “very productive,” crediting the calming setting of Lake Geneva for the progress.
“We have reached an agreement on a 90-day pause and will substantially bring tariff levels down,” Bessent said. “Both sides on the reciprocal tariffs will move their tariffs down 115%.”
The numbers speak volumes. U.S. tariffs on Chinese goods, which previously reached a peak of 145%, are now set to fall to around 30%. China’s tariffs on U.S. goods, formerly 125%, are being reduced to 10%. Some exemptions remain in place—such as the U.S.’s 20% duties on fentanyl-related imports—but the broader effect is unmistakable: a sharp de-escalation that investors had been desperately hoping for.
Relief for Big Tech
The pressure valve was finally released for U.S. tech giants with heavy exposure to China. Apple, still dependent on China for 90% of its iPhone assembly, saw its shares leap more than 7% in early trade. The company had recently warned that tariffs would add nearly $1 billion in costs for the quarter.
Amazon, long entangled in China’s vast production ecosystem through its network of third-party sellers, rose over 8% before markets opened.
Chinese tech firms listed on U.S. exchanges also joined the rally. Alibaba, JD.com, and Baidu saw notable gains, buoyed by signs of stabilization in U.S.-China trade relations and the possibility of renewed investor interest.
“This morning is a huge win for the bulls,” said Daniel Ives, Global Head of Technology Research at Wedbush Securities. “With U.S./China clearly on an accelerated path for a broader deal, we believe new highs for the market and tech stocks are now on the table in 2025.”
Yields Climb, Eyes on Inflation Data
The rally wasn’t confined to equities. U.S. Treasury yields also moved higher, reflecting improved investor sentiment and expectations of firmer economic data. The 10-year yield climbed nearly 6 basis points to 4.433%, while the 2-year yield added 10 basis points to reach 3.996%.
Markets now turn their attention to key inflation readings due this week. Tuesday brings the April Consumer Price Index, while the Producer Price Index and retail sales figures follow on Thursday. Analysts will parse the data for signs of how deeply trade tensions have affected consumer prices, supply chains, and broader economic activity since the U.S. first imposed its “reciprocal” tariff strategy in April.
A Fragile Truce in a High-Stakes Negotiation
While the mood in markets is one of relief, the truce is time-bound. The 90-day pause could pave the way for a broader agreement, or it could merely delay a deeper rupture in the world’s most consequential bilateral trade relationship.
The tech sector’s reaction suggests hope outweighs caution, at least for now. With a potential recalibration in trade policy underway and tariff levels rolling back from triple digits to more conventional ranges, global supply chains—especially for semiconductors and electronics—may yet stabilize heading into the second half of the year.
But beneath the euphoria, hang these questions: Will this deal hold? Can it evolve into something permanent? Or will the world’s two largest economies find themselves back at the negotiating table once the 90-day timer runs out?
