Global stocks rose on Monday after the United States and China committed to resuming trade talks.
The truce was met with optimism in Asia, where China’s benchmark Shanghai Composite (SHCOMP) and Tokyo’s Nikkei (N225) added more than 2%.
In Europe, Britain’s FTSE 100 (UKX) and France’s CAC 40 (CAC40) rose by just under 1% in early trade, while Germany’s DAX (DAX) advanced 1.6%.
President Donald Trump announced over the weekend at the G20 summit in Japan that he would hold off on new tariffs on China and lift some restrictions on Chinese tech giant Huawei.
US stock futures reacted positively. The Dow (INDU) was up 285 points, or 1.1%, and the Nasdaq (COMP), which includes key tech companies, rose by as much as 1.7%. The S&P 500 (INX) added 1.2%.
“The US and China are likely headed for a moderate trade deal with the US focusing on verifiable steps,” said Sebastien Galy, a senior macro strategist at Nordea Asset Management.
“The positive stance taken by the market is therefore warranted and the odds of another full blown conflict have moderated as the US administration is de-escalating,” he added
Trump on Saturday seemed to reverse his hard line on Huawei, saying that “US companies can sell their equipment” to the company as long as the transactions don’t present a “national emergency problem.”
The Trump administration had banned sales of US goods to Huawei without a license in May, putting the company under pressure.
US officials have accused Huawei, a global leader in telecom equipment and smartphones, of working to undermine US national security. Huawei has denied the accusations.
Existing tariffs remain in place and will continue to hit businesses. And the Trump administration’s position on Huawei remains clouded.
”The temporary agreement does little to resolve the fundamental conflicts over trade issues that broke down talks in May and does not amount to a sustainable solution for Huawei,” wrote analysts at Eurasia Group, a political risk consultancy.