U.S.-China Trade Agreement Sparks Market Rally

U.S. stock futures surged following a trade deal between the U.S. and China to reduce tariffs, providing a temporary reprieve from a tense trade war. Major indices showed significant gains, while crude oil prices rose. Pharmaceutical stocks fell as President Trump announced price cuts on prescription drugs.

In a noteworthy development, U.S. stock index futures sharply increased on Monday, driven by a newly inked deal between the United States and China aimed at tariff reduction. This agreement signals a pause in the intense trade war that has unsettled markets in recent weeks.

Under the deal, tariffs previously imposed on Chinese imports will be reduced from 145% to 30%, while Chinese duties on U.S. imports are set to drop from 125% to 10%. The measures, effective for 90 days, have been described as a significant de-escalation by economist Mark Williams, though he cautioned against assuming a permanent resolution.

The market response was immediate, with major indices such as the Dow, S&P 500, and Nasdaq posting substantial gains. Notably, mega-cap stocks like Nvidia and Tesla rose impressively. Yet, pharmaceutical stocks showed a contrasting trend due to President Trump's announcement of substantial prescription drug price cuts.

(With inputs from agencies.)