Equities
Wall Street’s main indexes were set to open sharply higher while other global markets rose on Monday after the U.S. and China agreed to drastically slash levies on each other’s goods.
A joint statement following weekend talks in Geneva said both countries would drop levies imposed since April 2, when U.S. President Donald Trump launched a tariff blitz that prompted retaliatory tariffs from China and other countries.
The pause in punishing levies that have rattled global markets is expected to last 90 days, U.S. Treasury Secretary Scott Bessent said, with the reductions to take effect by May 14.
U.S. tariffs on Chinese goods would be reduced from 145 per cent to 30, while China would cut its levies on U.S. imports from 125 per cent to 10.
“The market has to re-calibrate to what things look like before ‘Liberation Day’ and that looks like a very constructive growing economy,” said Thomas Hayes, chairman at Great Hill Capital LLC.
At 08:06 a.m. ET, Dow E-minis were up 1,007 points, or 2.44 per cent, S&P 500 E-minis were up 169.25 points, or 2.98 per cent, and Nasdaq 100 E-minis were up 783 points, or 3.89 per cent.
The CBOE Volatility Index, Wall Street’s “fear gauge,” briefly slipped below the 20-point threshold for the first time since late March – levels last seen before Trump’s April tariffs announcement.
TSX futures were also up.
In Canada today, investors are getting results from software firm Constellation Software Inc.; mining companies Denison Mines Corp., Hudbay Minerals Inc., and K92 Mining Inc.; health care provider Dentalcorp Holdings Ltd.; industrial equipment dealer Finning International Inc.; and real estate investment trust Simon Property Group Inc.
Overseas, the pan-European STOXX 600 was up 1 per cent in the early afternoon. Britain’s FTSE 100 increased by 0.55 per cent, Germany’s DAX gained 0.44 per cent – after rising to a record high earlier in the day – and France’s CAC 40 was up 1.45 per cent.
In Asia, Japan’s Nikkei closed 0.38 per cent higher, while Hong Kong’s Hang Seng closed 2.98 per cent higher.
Commodities
Oil prices rose nearly 4 per cent as cooling tensions between the world’s two largest crude users lifted market sentiment.
Brent crude futures climbed US$2.43, or 3.8 per cent, to US$66.34 a barrel. West Texas Intermediate crude futures were trading up US$2.51, or 4.1 per cent, at US$63.53.
Positive talks between the U.S. and China could boost demand as trade between the countries is restored.
“This is a start at least and is better news coming out of talks at the weekend than a failure to agree anything, so it is no surprise that oil markets are higher,” said Investec head of commodities Callum Macpherson.
In other commodities, safe-haven spot gold was down 3.3 per cent at US3,215.07 .
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 71.42 US cents to 71.97 US cents in early trading. The Canadian dollar was down about 0.88 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, gained 1.2 per cent to 101.54.
The euro lost 1.16 per cent to US$1.1122. The British pound was down 0.81 per cent to US$1.3197.
In bonds, the yield on the U.S. 10-year note was last up at 4.471 per cent ahead of the North American opening bell.
Economic news
China releases inflation data for April
2 pm ET: U.S. budget balance for April
With Reuters and The Canadian Press