Futures on the Dow Jones Industrial Average have surged more than 460 points after President Donald Trump and Chinese President Xi Jinping agreed to a 90-day halt to their trade war that has concerned world equity markets for most of the year, CNBC reported on Sunday.
In addition to the Dow, futures for the S&P 500 and the Nasdaq have also jumped significantly, with futures on oil and copper posting large increases as well on hopes a China-U.S. trade deal could boost global economic growth.
In the agreement, Trump agreed not to boost tariffs on $200 billion of Chinese goods from 10 percent to 25 percent on January 1 in exchange for Beijing pledging to buy a "very substantial" amount of agricultural, industrial and energy products, according to the US. China says the two sides also agreed to open up their markets, the BBC reported.
"The explicit delay in tariffs is on the positive end of expectations," Bank of America Lynch China and Asia economist Helen Qiao said, according to CNBC. "In contrast to the fear - especially in Asia - that the hawks in US administration would make impossible demands, evidence of President Trump working towards a trade deal with China has emerged."
The Dow had already rallied more than 5 percent last week in anticipation of a truce in the trade war.
Sacha Tihanyi, deputy head of emerging markets for TD Securities, warned, however, that “the overarching concerns in the US-China relationship remain, and thus should imply caution for markets past the short-term."
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