U.S., China Slash Tariffs, Stocks Take off

Futures for Canada's main stock index surged on Monday, after the United States and China agreed to temporarily slash reciprocal tariffs, bolstering investor optimism and easing fears of an all-out trade war unsettling global markets.

The TSX Composite Index rocketed 103.68 points to Friday at 25,357.74. The index climbed 326 points, or 1.3%, on the week.

June futures vaulted 1.3% Monday.

The Canadian dollar stumbled 0.26 cents to 71.54 cents U.S.

Following weekend talks in Geneva, the two largest economies announced on Monday that the U.S. will reduce the extra tariffs it imposed on Chinese imports in April to 30% from 145%, and Chinese duties on U.S. imports will drop to 10% from 125%. The new measures will be effective for 90 days.

The U.S.-Sino deal comes days after the United States and the UK's limited trade agreement that signaled an easing of tariff-related uncertainty.

Back home, Prime Minister Mark Carney's new cabinet will be sworn in on Tuesday.

In corporate news, Pan American Silver will acquire MAG Silver Corp in a transaction that values the silver mining company at about $2.1 billion.

ON BAYSTREET

The TSX Venture Exchange flew 4.36 points to 683.40, for a gain of 27 points, or 4.1% since last Friday.

ON WALLSTREET

U.S. stock futures jumped early Monday after the U.S. and China agreed to temporarily slash tariffs following negotiations over the weekend in Switzerland.

Futures for the 30-stock index sprang up 1,010 points, or 2.5% to 42,333.

Futures for the S&P 500 index jumped 172.75 points, or 3%, to 5,850.75

Futures for the NASDAQ flew 789.5 points, or 3.9%, to 20,926.25.

U.S. Treasury Secretary Scott Bessent said on Monday that talks with China had been “very productive” and both countries had agreed to cut “reciprocal” tariffs by 115% for 90 days. That brings U.S. tariffs on Chinese goods down to 30%, and Chinese tariffs on U.S. imports to 10%.

Bessent told reporters on Monday that he expects to meet once again with representatives from Beijing in the “next few weeks” to iron out a bigger agreement.

Best Buy, which sells electronics and appliances vulnerable to tariffs, popped 8% in the premarket to lead S&P 500 gains. Dell Technologies and On Semiconductor also climbed more than 8%, while Amazon and Apple advanced more than 8% and 7%.

Tensions between China and the U.S. soared after President Donald Trump last month unveiled 145% tariffs on imported goods from China. Beijing then retaliated with 125% duties of its own targeting U.S. goods.

The S&P 500 nearly closed in bear market territory — down more than 20% from a record set in February — following the “liberation day” announcement. Stocks quickly rebounded after Trump cut tariffs on the rest of the world, but gains were held in check as investors awaited progress on U.S.-China trade negotiations.

Investors this week will look for signs on how the trade tensions are impacting the economy. The consumer price index reading for April is due Tuesday morning, while retail sales and the producer price index — another inflation measure — are set for release on Thursday.

In Japan, the Nikkei 225 index gained 0.4% Monday, while in Hong Kong, the Hang Seng shot higher 3%.

Oil prices zoomed $2.51 to $63.53 U.S. a barrel.

Gold prices swooned $122.10 to $3,221.96 U.S. an ounce.