Global investors are cheering a thaw in the trade war sparked by US President Donald Trump’s massive tariffs, which have roiled financial markets, disrupted supply chains and stoked recession fears.

Stock markets around the world rose Monday after the United States and China agreed to drastically roll back tariffs on each other’s goods for an initial 90-day period.

Hong Kong’s Hang Seng index was up 3.4% late afternoon local time.

In Europe, Germany’s DAX index and France’s CAC were 1.2% and 1% up respectively early in the trading session. London’s FTSE index rose 0.3%.

US futures were also up. The Dow was set to open 2.1% higher, while futures in the S&P 500 and tech-heavy Nasdaq were trading 2.7% and 3.6% higher respectively.

The US dollar strengthened early Monday following the breakthrough in trade talks. The ICE dollar index, which measures the greenback’s strength against a basket of major currencies, rose 1.3% to $102.

Brent crude, the global oil benchmark, was trading 2.8% higher.

“This is buying time for a more comprehensive deal – allows for time for the process and ‘mechanism’ in the words of Treasury Secretary Bessent to take place,” Neil Wilson, a strategist at investment platform Saxo Markets, wrote in a note Monday.

“But he also stressed that strategic rebalancing of the global economy is still underway, although ‘neither side want a decoupling,’ which is the sort of commentary the market is going to lap up. But it is not true – the US is absolutely trying to decouple.”

The US and China have agreed to roll back tariffs

The United States and China have agreed to drastically roll back tariffs on each other’s goods for an initial 90-day period, according to a joint statement from the two countries released Monday.

The announcement comes after a weekend of marathon trade negotiations in Geneva, Switzerland by officials from the world’s two largest economies.

The tariff revisions will be imposed by May 14. US President Donald Trump’s 20% fentanyl-related levies on China, imposed in February and March, will stay. However, each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.

That effectively means the US will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%, according to the joint statement.

The two sides also agreed to establish “a mechanism to continue discussions about economic and trade relations,” led by Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, according to the statement.

“These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” it read.