Stock market futures are up this morning, thanks to a newly announced tariff truce between the United States and China. Leaders from both countries met over the weekend, agreeing to hold off on new tariffs as negotiators restart talks for a long-term trade deal.
The stock market had one of its best months on record in June, and this latest news could keep growth going into the third quarter.
Trump Agrees on Truce During G-20 Summit
President Donald Trump and Chinese President Xi Jinping met on the sidelines of the G-20 summit on Saturday. Both leaders agreed that current tariffs will remain in place, but no new tariffs will be introduced for as long as negotiations are productive. The meeting signaled a restart for trade negotiations that had broken down in recent weeks.
Trump released a statement on Twitter saying that “I had a great meeting with President Xi of China yesterday [Saturday 29th], far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate. China has agreed that, during the negotiation, they will begin purchasing large amounts of agriculture products from our great Farmers.”
There was other good news for investors. The President announced that he would allow U.S. tech companies to sell products to Huawei, the Chinese telecommunications giant that has been accused of espionage and trade sanctions violations. Trump noted that tech companies could only supply Huawei with products that don’t impact national security.
There was no timeline offered on how long it would take for a new trade deal to be reached. The President said in his statement that “The quality of the transaction is far more important to me than speed.”
Futures are Up as Markets Open for the Week
The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite futures were all up in a range of 1% to 1.8% on Monday morning. This follows a month of record performance for two of the largest indexes.
The Dow Jones had its best June return since 1938, while the S&P 500 had its best since 1955. News of the tariff truce could continue to provide confidence in the markets throughout July and into the rest of the quarter.
Job numbers will be released later this week after the Independence Day holiday, providing another datapoint for investors and analysts to gauge the current health of the U.S. economy.
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