American stocks rise as US and China make progress in trade talks

American stocks and the dollar rallied after China and the US reported major breakthroughs in two-day talks over the weekend aimed at easing trade tensions between the two countries.

As a result of retaliatory measures, the US has hiked tariffs on Chinese imports to 145%, prompting Beijing to impose 125% duties on American goods. Washington has now proposed cutting tariffs below 60% as an initial step, with officials suggesting China may be willing to follow suit.

Trump suspended the highest tariffs for most countries, excluding China, sending the S&P 500 higher.

The S&P 500 climbed 1.5%, the Nasdaq 100 surged 2%, and European markets rose 1%. The dollar strengthened against the Swiss franc and yen, outpacing most European currencies. However, it slipped against the yuan and China-linked currencies as traders bet the world’s top exporter would benefit from easing trade tensions.

Gold dropped 1.6% while US Treasuries sold off as investors scaled back their rate-cut expectations.