5 market moves that show the massive impact of the US-China trade truce

A weekend truce in the trade war between China and the US sent the stock market to all-time highs on Monday.

Speaking during his visit to Asia, Donald Trump said China and the US were headed for a trade deal ahead of a meeting between the president and China’s Xi Jinping scheduled for later this week.

Treasury Secretary Scott Bessent said that the deal would allow China to avoid the 100% tariff threatened by Trump in retaliation for export controls on rare earth minerals.

Some commentators warned investors against getting complacent, as the deal could ultimately disappoint.

“Trade worries ignited the October 10 selloff of almost 3%, and there’s always a chance one side or the other might not be agreeable. Any negative headlines would likely disappoint Wall Street. That’s especially true this time, considering Trump threatened to raise tariffs on Chinese imports to 155% on November 1 “unless we make a deal,” Joe Mazzola, head of trading and derivatives strategy at Charles Schwab, said on Monday.

For now, though, investors are upbeat on a reprieve from trade tensions. Here are the big moves as markets reacted to the news:

Stock indexes at all-time highs

After surging to all-time highs on Friday following a tame September inflation report, investors kept the rally going on Monday.

Here’s where major indexes stood at 10:50 a.m. ET:

Chip stocks up

Investors bought up chip stocks as the threat of restrictions on the sale of high-grade tech to China faded. Nvidia jumped 3%, while rivals AMD and Broadcom also rose.

Qualcomm stock, meanwhile, spiked on news that the company is jumping into the AI race with its own chips to challenge Nvidia.

Rare earth stocks slip

As part of the deal, China could delay export controls on critical rare earth materials. The sector has been bolstered in recent weeks by the possibility of lower supply, which boosted US miners.

Big moves in the sector include:

Gold

After stumbling last week, gold dropped again on Monday as the easing trade tensions dented some of the appeal of the traditional safe-haven asset.

Gold was down 3% and was trading below $4,000 an ounce again after a blistering rally this year took the metal to a series of all-time highs.

Gold has been a cornerstone of the debasement trade this year, rising steadily amid fears of trade wars, high government debt, and geopolitical tensions.

Treasury yields jump

Risk-on sentiment returned with the waning of trade tensions. The benchmark 10-year Treasury yield jumped back above 4% as investors sold bonds and piled into stocks.