US pre-open: Futures surge as US-China talks calm trade jitters
By Benjamin Chiou
Date: Monday 12 May 2025
(Sharecast News) - Stock futures were pointing to a big surge on Wall Street early on Monday as investors breathed a sigh of relief following the weekend's fruitful trade talks between the US and China.
By 0522 ET, Dow Jones futures were up 2.1%, the S&P 500 was rising 2.8% and the Nasdaq had jumped 3.8%.
The US and China are to significantly lower tariffs, it was confirmed on Monday, after a key agreement was struck in Geneva over the weekend. The world's two largest economies will now cut levies for the next 90 days. Washington will reduce tariffs on Chinese goods to 30% from 145%, while Beijing will lower duties to 10% from 125%.
Equities rallied on the news, while the dollar extended gains against the euro and yen. Gold, a safe-haven asset that has soared in recent weeks, fell back nearly 4%.
Speaking at a press conference in Geneva, US Treasury secretary Scott Bessent said: "We want more balanced trade, and I think both sides are committed to achieving that.
"While the trade spat has only been dialled back for 90 days, it's a major breakthrough as far as investors are concerned. The fact the two countries were talking was already a major win given they've been at each other's throats during the first and second Trump presidential terms," said Russ Mould, investment director at AJ Bell.
"Some people thought the best-case outcome from the weekend's discussions would be an agreement to simply keep talks going. Therefore, to have reached an initial deal so quickly and one that rolls back tariffs by a large amount is a pleasant surprise."
Banking stocks were rising strongly ahead of the opening bell, including Bank of America, Citigroup and JPMorgan, along with tech heavyweights Apple, Nvidia and Microsoft.
However, pharma stocks were falling in pre-market trade after Trump signalled that he may sign an executive order to cut prices of prescription drugs. Futures in Eli Lilly, Pfizer and AbbVie were all showing heavy losses.
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