NEW YORK, New York - U.S. stocks surged on Monday following news that the Trump administration had agreed to a 90-day reduction of trade tariffs in a preliminary move aimed at finalising an overall trade deal. The surprise announcement caught investors and traders by surprise, coming so quickly after a two-day summit in Switzerland, and the breadth of which was far better-than-expected.

Under the terms of the agreement, the United States has reduced tariffs from 145 percent to 30 percent, while China has dropped 125 percent tariffs to 10 percent. 

"We've made some progress with regards to the China/U.S. tariff situation. The market perceives any progress as positive,"  Chris Brigati, chief investment officer at SWBC, an investment company in San Antonio, TX, told Reuters Monday. "The market is celebrating it for the moment, but in the long run, there could be complications, and we could see some negative implications." Patrick Kaser, a portfolio manager at Brandywine Global, told Reuters: "There's still uncertainty. It's still hard for companies to make decisions on spending. The market is acting like the risk has gone away, but I don't think that's how a lot of businesses and companies are going to view the situation."

While some market participants were wary, others were blown away by the speed at which the deal had come.

"Markets are rallying because investors are surprised with the velocity of the Chinese trade tariff deal progress," Jeff Kilburg of KKM Financial told CNBC Monday.

Huge Gains Across the Board

The Standard and Poor's 500 (^GSPC) catapulted 184.28 points higher (3.26 percent) to close at 5,844.19, marking its best single-day performance this year. Trading volume topped 3.7 billion shares as buyers flooded the market.

The Dow Jones Industrial Average (^DJI) joined the rally, jumping 1,160.72 points (2.81 percent) to 42,410.10, while the NASDAQ Composite (^IXIC) stole the show with a 779.43-point (4.35 percent) surge to 18,708.34 – its biggest one-day gain since November 2022. Nearly 9.6 billion shares changed hands on the tech-heavy index.

U.S. Dollar Strengthens Against Major Currencies in Monday's FX Trading

The U.S. dollar showed broad strength in Monday's foreign exchange session, gaining ground against most major currencies as investors adjusted positions ahead of key economic data releases.

Euro and Pound Retreat Against Greenback

The EUR/USD pair fell sharply to 1.1091, down 1.38 percent as the euro weakened amid lingering economic concerns in the Eurozone. Similarly, the GBP/USD declined to 1.3179, shedding 0.95 percent as traders weighed mixed signals on UK monetary policy.

U.S. Dollar Gains Against Yen, Swiss Franc, and Commodity Currencies

The USD/JPY rose to 148.35, climbing a hefty 2.06 percent as the Bank of Japan's ultra-loose policy stance continued to pressure the yen. The USD/CHF also strengthened, gaining 1.75 percent to 0.8453, reflecting the dollar's broad momentum.

Commodity-linked currencies struggled, with the AUD/USD diving 0.62 percent to 0.6369 and the NZD/USD dropping 0.79 percent to 0.5858 as risk sentiment remained cautious.

Loonie Finishes Day With Modest Loss

The USD/CAD edged up 0.39 percent to 1.3983, though the Canadian dollar held up better than most peers amid steady oil prices.

Market Drivers and Outlook

"The FX markets are pricing in a ‘higher for longer' Fed stance while other central banks appear closer to cutting rates," noted Maria Chen, currency strategist at Global Markets Advisory.

Traders will watch Tuesday's US CPI release for fresh direction, with volatility likely to persist across currency markets.

Global Stock Markets Close Higher on Monday as Major Indices Post Gains

Global stock markets ended Monday's trading session mostly higher, with several key indices recording notable gains amid positive investor sentiment.

Canada's TSX Rides the Wave

North of the U.S. border, Canada's S&P/TSX Composite (^GSPTSE) posted solid gains, rising 174.44 points (0.69 percent) to 25,532.18 on a healthy 393 million shares being traded.

UK and Europe Lead with Broad Gains

The FTSE 100 (^FTSE) in London rose to 8,604.98, climbing 50.18 points (up 0.59 percent).

Germany's DAX (^GDAXI) advanced 67.22 points (0.29 percent) to close at 23,566.54, while France's CAC 40 (^FCHI) surged 106.35 points (1.37 percent) to 7,850.10.

The broader EURO STOXX 50 (^STOXX50E) jumped 82.62 points (1.56 percent) to 5,392.36, and the Euronext 100 (^N100) gained 25.96 points (1.67 percent) to 1,582.77. Belgium's BEL 20 (^BFX) also saw an uptick, adding 35.83 points (0.82 percent) to 4,410.05.

Asia-Pacific & Southeast Asian Stock Markets Mostly Positive

In Asia, Hong Kong's Hang Seng Index (^HSI) soared 681.72 points (2.98 percent) to 23,549.46, marking one of the strongest performances of the day. Singapore's STI Index (^STI) edged up 27.94 points (0.73 percent) to 3,876.16.

In China, the SSE Composite (000001.SS) gained 27.25 points (0.82 percent) to 3,369.24. Japan's Nikkei 225 (^N225) closed at 37,644.26, up 140.93 points (0.38 percent).

Australia's S&P/ASX 200 (^AXJO) inched up 2.30 points (0.03 percent) to 8,233.50, while the All Ordinaries (^AORD) gained 4.40 points (0.05 percent) to 8,467.00.

India's S&P BSE SENSEX (^BSESN) was the star of the day, soaring 2,975.43 points (3.74 percent) to 82,429.90, leading gains in the region.

Meanwhile, Indonesia's IDX Composite (^JKSE) rose slightly by 5.05 points (0.07 percent) to 6,832.80, and Malaysia's FTSE Bursa Malaysia KLCI (^KLSE) added 3.76 points (0.24 percent) to 1,546.50.

New Zealand's S&P/NZX 50 (^NZ50) climbed 71.68 points (0.57 percent) to 12,676.75, while South Korea's KOSPI (^KS11) gained 30.06 points (1.17 percent) to 2,607.33. Taiwan's TWSE (^TWII) rose 214.50 points (1.03 percent) to 21,129.54.

Mixed Moves in Middle East

Israel's TA-125 (^TA125.TA) bucked the trend, slipping 5.18 points (down 0.19 percent) to 2,664.31. Egypt's EGX 30 (^CASE30), however, rose 149.00 points (0.47 percent) to 31,577.00.

Africa 

South Africa's Top 40 USD Net TRI (^JN0U.JO) saw a modest increase of 4.42 points (0.09 percent) to 4,973.30.