The trade tensions between the world's two largest economies cooled down, causing the Dow Jones (DJIA) to increase by more than 1,000 points, while the price of gold fell by nearly 100 USD.
At the opening of the trading session on May 12, all three major US stock indexes increased sharply. The DJIA is currently up 1,031 points, equivalent to 2.5%. The S&P 500 and Nasdaq Composite are up 2.73% and 3.7%, respectively.
Technology and semiconductor stocks are also on the rise. Chip companies Nvidia, AMD, Broadcom, and Qualcomm are currently up 4-5.5%. Previously, this group was strongly affected by the US import tax policy.
Apple shares increased by 5%. Earlier this month, CEO Tim Cook warned that import tariffs could add about $900 million to the company's costs this quarter. The reason is that the company has to redirect its massive supply chain to minimize the impact of the global trade war.
Shares of e-commerce giant Amazon rose as much as 7.6%. Many sellers on Amazon rely on products from China.
Chinese technology stocks listed in the US also recorded gains. Alibaba, JD.com and Baidu all rose 3-6%.
US stocks rose on news that trade tensions with China had cooled. On May 12, the world's two largest economies issued a joint statement on reducing import tariffs and delaying some tariffs for 90 days. Accordingly, the total import tariff on Chinese goods will be temporarily reduced from 145% to 30%. Similarly, tariffs on US goods will be temporarily reduced from 125% to 10%.
"With the US and China clearly accelerating toward a larger deal, we expect the market and tech stocks to continue to rise. Investors will be closely watching the next developments in trade negotiations over the next few months," said Daniel Ives, director of technology research at Wedbush Securities.
Meanwhile, the cooling of trade tensions has caused global gold prices to plummet. Currently, each ounce has lost $90 to $3,233. Previously, the price had fallen to $3,223 - the lowest since early May.
"The US and China's agreement to reduce tariffs for 90 days has reduced demand for safe-haven gold," explained Giovanni Staunovo, an analyst at UBS.
In the crude oil market, prices are currently up more than 3%, due to expectations of a recovery in oil demand in both the US and China - the world's two leading oil consumers. Brent crude rose 3.2% to $65.9 a barrel. US WTI crude rose 3.36% to $63.
(according to Reuters, CNBC)