Early Monday, the U.S. and China announced the temporary suspension of most of the tariffs each imposed on the other in April.
The suspension will be good for 90 days while the two countries negotiate a full tariff agreement.
Financial markets were rallying heavily in response.
The U.S. agreed to reduce its 125% tariff on all Chinese goods exported to the U.S. to 10%. Its 20% tariff that President Donald Trump imposed to retaliate for China's alleged role in exporting fentanyl into the U.S. will remain.
So, the total tariff on imports to the U.S. from China would be 30%.
China, meanwhile, agreed to cut to 10% its tariff rate on goods imported from the U.S. It had been 125%, imposed in retaliation to U.S. tariffs.
The negotiations for a full trade agreement would be led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer for the U.S. and by Vice Premier He Lifeng for China.
Asian and European stocks were surging on the news.
Futures trading in U.S. stocks suggested a huge open. The S&P 500 futures were up 158 points to 5,836. Futures based on the Dow Jones Industrial Average were up nearly 850 points.
Gold, meanwhile, was off more than $100 to $3,227 per troy ounce.
Crude oil was up $2 to $63.04.
Some good news for the economy
The U.S economy looks as if it might have already received a very good piece of news to start the week. That was what the financial markets were saying late Sunday.
The good news: Reports the U.S. and China appear ready to negotiate a new trade deal that would bring tariffs on goods between the two countries down again.
Right now, they're so high — 145% on goods coming from China and 125% on goods being shipped to China — that, well, there's no point. So little point that the Port of Los Angeles and other West Coast ports have seen activity abruptly shrink.
You don't spend $100 on, say, a box of toners for a laser printer and then spend another $145 in tariffs just to get your precious toner into the U.S.
So, the expectation — for now — is that the negotiators will work to craft a new tariff regime that will keep President Trump happy and allow tariff rates fall to reasonable levels that support commerce.
There was talk of an 85% tariff on Chinese imports on Friday. Way too high. Again, you don't spend $100 on a box of toners and pony up another $85 to get them into the United States.
Howard Lutnick, the commerce secretary, suggested a 34% tariff for China. Again, do you want to spend $1,000 on a high-end lacquered chair and another $340 in tariff charges, plus shipping, sales taxes and and other fees?
It's not for us to design a tariff regime. For us, however, it is fair game to point out the real-world effects.
Peter Boockvar, chief investment officer at Bleakley Financial Group, says the top tariff rate "can't be more than 20% and even that would be tough for many."
So, relish the good news from Geneva: Both teams have found out something. They can talk to each other.
And that's why, late Sunday, futures markets were pricing in a 1.3% gain on the Standard & Poor's 500 index. That could put the index maybe 6.6% below its 52-week high of 6,147 on Monday. The index last reached that level on Feb. 19.
We'll see how this plays out. We still don't know all the details.
The Federal Reserve says it makes decisions based on the data. The central bank will get a lot of data this week. Here's a rundown.
Inflation reports
CPI report
On Tuesday, the Bureau of Labor Statistics releases its April Consumer Price Index report. It's expected to show a year-over-year gain of 2.4% even if analysts see the index falling month to month. (That will probably reflect falling gasoline prices.) The core CPI, which strips out food and energy, is expected to run at 2.8% year over year.
PPI report
On Thursday, the BLS, part of the Labor Department, releases its Producer Price report. This measures input costs to make stuff. It's expected to show a 2.7% gain year over year, with the core index showing a 3.4% annual change.
The reports will annoy the Trump administration, which wants the Federal Reserve to cut interest rates. The Fed, as is well known, wants inflation to drop to 2% first.
A worker assembles chassis parts at a General Motors assembly plant in Fort Wayne, Indiana.Bloomberg/Getty Images
Jobless claims
This weekly report released Thursdays by the Labor Department measures new filings, which were down by 13,000 last week, and continuing claims. These were up 17,861 last week. If the economy starts to sink rapidly, this report will be among the first to see it.
Two key manufacturing reports
The Federal Reserve Banks of New York and Philadelphia release monthly reports on activity in their districts. The reports, to be released Thursday, tend to pick up details that don't appear in national reports. Both banks' reports for March showed declining activity with employers trimming hours rather than jobs.
Housing starts and building permits
These reports, coming out Friday from the U.S. Census Bureau, try to measure housing construction activity across the country. The activity has been sluggish this because of two big, constant issues
High prices.
High mortgage rates. Mortgage rates are at or just below 7%, and qualifying for a mortgage is especially tough on first-time buyers.
The spring house-buying season, The Wall Street Journal noted, "is shaping up as a dud."
Building stocks have mostly been struggling in 2025. The iShares U.S. Home Construction (ITB) exchange-traded fund is still down 11%.
Among the ETF's components, shares of D.R. Horton (DHI) , one of the very largest home builders, is off 12.7% this year. Home Depot (HD) is down 6.8%, but paint-maker Sherwin-Williams (SHW) is up 4.4%.
University of Michigan Consumer Sentiment Index
This is a widely watched soft indicator due Friday. That is, it catches consumer optimism or pessimism. And maybe those attitudes will spread into the economic data. (Sometimes, pessimism never translates into spending changes.) Friday's report is basically a first draft with a final draft released at month's end.
The index has been consistent. It has fallen for four straight months as consumers are worried about prices and jobs.
The Conference Board's Consumer Confidence Index tends to confirm the Michigan findings. The report for April said consumer expectations for the future were at the lowest level since October 2011.
