Global Markets Rise as U.S., China Agree on Temporary Tariff Cuts

By Dow Jones Newswires StaffU.S. stock futures soared, the dollar hit a one-month high and Treasury yields rose early Monday in Europe after the U.S. and China agreed to suspend most tariffs.President Trump's "reciprocal" tariffs on China will fall to 10% from 125% and China will slash its tariff on U.S. goods to 10% from 125%, according to a joint statement. The reductions will last for 90 days while talks continue.U.S. stock futures, already up on optimistic noises from the joint trade talks in Switzerland, rose further following the statement, with S&P 500 futures up 2.75%, Nasdaq stock futures up 3.79% and those for the Dow Jones Industrial Average up 2.2%.The dollar hit a one-month high, with the DXY dollar index against a basket of major currencies reaching 101.414. The euro, meanwhile, fell to a one-month low of $1.1132, according to FactSet.Bitcoin rose to $105,645 compared with $104,392 just before the China-U.S. trade statement.Asian stock market indexes were higher, led by China, after the U.S. and Beijing reached a deal to substantially lower tariffs. Nikkei was up nearly 0.4% and South Korea's Kospi ended 1.2% higher.U.S. Treasury yields extended their rise, with the 2-year yield up 8 basis points to 3.9601% and the 10-Year yield up six basis points to 4.4339%, according to FactSet.In Europe, the Stoxx Europe 600 gained 1.2% in morning trading; France's CAC 40 rose 1.4% and Germany's DAX gained 1.7%. The U.K. blue-chip FTSE 100 added 0.7%.Pharmaceutical stocks headed down, however, after President Trump said he planned to cut U.S. prescription drug prices with an announcement expected later Monday. If Trump uses price caps on pharma imports rather than tariffs to reduce the cost for U.S. patients then this could have "big ramifications" for pharma companies and their profits, wrote Kathleen Brooks, research director at XTB, in a note. AstraZeneca shares fell 4.2% in early trade, GSK lost 2.4% and Novo Nordisk dropped 7.7%.Safe-haven assets gold and the Swiss franc fell; continuous gold futures fell 3.25% to $3,235.30 a troy ounce, the lowest level since May 5, while the dollar reached a one-month high of 0.8443 francs, according to FactSet.Brent crude climbed 2.7% to $65.61 a barrel, while WTI crude climbed 2.9% to $62.79 a barrel. European benchmark natural gas futures were recently up 3.1%.Write to Barcelona Editors at [email protected]