Seoul: Global markets rallied Monday as optimism spread across Asia and Wall Street following news that U.S. and Chinese officials had agreed on a framework for a long-awaited trade deal. The breakthrough, which could prevent a tariff escalation to as high as 157% on Chinese imports, brought relief to investors and lifted sentiment across global exchanges.
U.S. stock futures surged in Sunday evening trading, signaling a positive start to the week. Dow Jones Industrial Average futures rose 0.65%, S&P 500 futures gained 0.74%, and Nasdaq futures advanced 0.92% by 6:29 p.m. ET. The rally came after the Dow closed above 47,000 for the first time on Friday, buoyed by data showing that September’s inflation, though rising, was milder than economists feared.
The Consumer Price Index report renewed hopes that the Federal Reserve might move ahead with another interest rate cut during its policy meeting this week, a step that could further stimulate economic activity. The prospect of easing rates, combined with trade relief, offered a double boost to investor confidence.
Markets across Asia opened strong on Monday as optimism spilled over from Wall Street. Japan’s Nikkei 225 jumped 1.9% in early trading, while South Korea’s Kospi soared 2.4%. Hong Kong’s Hang Seng Index also climbed 1.28%, reflecting renewed investor confidence in the stability of U.S.–China economic ties.
The regional rally comes after weeks of volatility triggered by heightened trade tensions, which had rattled currencies and manufacturing stocks across the continent.
The trade breakthrough sets the stage for a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping, scheduled for Thursday in South Korea. The leaders are expected to finalize the deal that could reset the tone of one of the world’s most consequential economic relationships.
The recent strain between Washington and Beijing began after China tightened export restrictions on rare-earth minerals, critical components in electronics, defense systems, and renewable technologies. In response, Trump threatened to impose a 100% increase in tariffs “over and above” existing duties a move that risked inflaming global supply chains.
However, both sides have signaled a willingness to step back from confrontation. U.S. Treasury Secretary Scott Bessent, speaking from Kuala Lumpur on Sunday, confirmed that a “substantial framework” had been agreed upon. “I think we’ve reached a substantial framework for the two leaders who will meet next Thursday … that tariffs will be averted,” Bessent said on ABC’s This Week.
On NBC’s Meet the Press, Bessent added that the U.S. is likely to receive “some kind of deferral” on China’s rare-earth export controls a critical concession, given that Beijing currently controls over 90% of the world’s refined rare-earth output.
The protracted tariff war has strained multiple sectors of the U.S. economy, particularly agriculture. American soybean farmers, once major exporters to China, have suffered significant losses since Beijing halted purchases earlier this year.
Under the new framework, China is reportedly prepared to resume agricultural imports, including soybeans and corn, offering much-needed relief to farmers in the Midwest. Before trade tensions flared, China was the largest buyer of U.S. soybeans, importing $12.5 billion worth in 2024.
While the framework still requires finalization at the upcoming Xi–Trump summit, markets are interpreting the move as a signal that both nations are ready to de-escalate. The deal, once confirmed, is expected to stabilize global trade, bolster investor confidence, and open the door for deeper cooperation in emerging sectors like green technology and AI manufacturing.
For now, the combined optimism of a potential tariff truce and an expected Fed rate cut has created one of the most bullish starts to the trading week in months. As one Wall Street strategist put it, “The market has been holding its breath for a breakthrough and now it’s starting to exhale.”