AUS
NZ
UK
CA
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Highlights
- US-China slash tariffs, driving global equity surge
- ASX200 follows global markets higher after positive trade shift
- Energy and tech stocks among top beneficiaries
Global equity markets, including the ASX200, received a strong boost following a major trade breakthrough between the United States and China. Both countries agreed to significantly reduce tariffs on each other’s goods, creating a 90-day window for further negotiations and easing long-standing trade tensions.
Under the new agreement, which takes effect from 14 May, the US will lower its tariffs on most Chinese imports from 145% to 30%. China, in turn, will reduce its levies on American goods from 125% to 10%. This dramatic 115 percentage point reduction is expected to rejuvenate cross-border trade that had been previously constrained by high tariffs.
The announcement sparked a powerful rally across global stock markets. On Wall Street, the Dow Jones Industrial Average leaped over 1,100 points to close 2.81% higher at 42,410. The S&P 500 gained 3.26%, trimming its year-to-date losses to just 0.6%, while the tech-heavy Nasdaq surged 4.35% to close at 18,708 — its best performance since early April.
The rebound restored substantial market capitalisation to several technology leaders, including Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Alphabet (NASDAQ:GOOGL), all of which had seen value decline during April’s escalation in trade tensions. This renewed optimism has extended to energy and resource sectors as well, as China will also cut its additional tariffs on US energy products by 91 percentage points, potentially revitalising US crude and LPG exports.
Commodity markets reacted swiftly. Oil prices moved higher on the news, with industry analysts projecting that trade flows could gradually return to pre-tariff levels. According to S&P Global, recent estimates for China’s GDP growth and oil demand in 2025 had been downgraded due to trade disruptions, but these may now be revised upward if the tariff reprieve proves lasting.
For investors monitoring Australian markets, the ripple effects are already visible. The ASX200 tracked the global momentum, with particular strength in tech and resources. Meanwhile, income-focused strategies may find renewed interest in ASX dividend stocks as sectors benefit from a more favourable trade environment and improved earnings outlooks.
With talks between the two economic superpowers set to continue, markets are closely watching for signs that this 90-day truce could evolve into a more enduring resolution. For now, sentiment appears to have turned decisively positive.
