Investing.com - Canada’s main stock exchange closed higher on Monday , as investors cheered an agreement by the U.S. and China to substantially lower punishing tariffs on each other and push pause on the levies for 90 days.
By the 4:00 ET close, the S&P/TSX 60 index rose by 12.9 points or 0.9%.
The Toronto Stock Exchange’s S&P/TSX composite index gained 174.4 points or 0.7%. On Friday, the index gained 103.68 points, or 0.4%, notching its highest closing level since February 28. The index also logged its fifth-consecutive weekly increase.
Wall Street spikes after U.S.-China tariff agreement
U.S. stocks surged Monday following news of the trade agreement between the U.S. and China.
At the 4:00 ET close, the Dow Jones Industrial Average gained 1,160.7 points, or 2.8%, the S&P 500 climbed 184.3 points, or 3.3%, and the NASDAQ Composite rose 779.4 points, or 4.4%.
Gains come after a positive week on Wall Street, as the prospect of a Sino-U.S. trade deal lifted spirits and spurred buying into risk-driven assets.
The U.S. and China have agreed to a 90-day pause to soaring tariffs placed on each other, Washington has moved to slash tariffs on China to 30% and Beijing’s duties on U.S. imports are being cut to 10%, the nations said in a rare joint statement following high-stakes trade talks over the weekend.
Heading into the talks, U.S. President Donald Trump had raised tariffs on China to at least 145%, leading China to respond with retaliatory levies on American imports of 125%.
"The consensus from both delegations is that neither side wanted a decoupling," U.S. Treasury Secretary Scott Bessent said in a news conference.
More trade negotiations are planned between the two, while both sides may conduct working-level consultations on relevant economic and trade issues.
Investors, who have been worried that the trade spat could spiral into a global crisis that threatened economic activity and increased uncertainty for businesses, have welcomed the changes.
“The tone of stock markets has been downward over the last two months, weighed down by fear of the effects of a possible tariff war and other tough-line measures by Donald Trump, but the situation shows signs of some stabilization and even moderate upturns have been seen in the most recent sessions," said Alberto Matellan, managing director at La Financiere Responsable.
“All of this is explained by the loss of confidence caused by the White House, something that has not been reversed; however, if progress is made toward a clearer scenario, the market’s performance will be positive.
Earnings
In Monday morning’s earnings, Fox Corp (NASDAQ:FOXA) reported better-than-expected earnings and revenue, and the stock has since gained 4.6% in trading. Monday.Com Ltd (NASDAQ:MNDY) shares jumped as well, before evening-out after market open, after reporting stronger earnings and revenue than anticipated.
Investors will be anticipating earnings from key companies such as Berkshire Hathaway (NYSE:BRKa), JD.com Inc Adr (NASDAQ:JD), Cisco Systems Inc (NASDAQ:CSCO), Walmart Inc (NYSE:WMT), and Alibaba ADR (NYSE:BABA).
Crude up
Oil prices rose, building on last week’s sharp gains as the announcement of a China-U.S. trade deal raised hope that the world’s two largest crude users may be moving toward a resolution of their dispute.
At 5:20 ET, Brent Oil Futures climbed 0.2% to $65.08 a barrel, and Crude Oil WTI Futures rose 1.6% to $61.98 a barrel.
Both contracts rose by more than 4% last week on optimism over a potential de-escalation in Trump’s tariff agenda.
Gold slips
Elsewhere, gold prices sank as optimism around the trade agreement dented the safe-haven appeal of the yellow metal.
Bullion, which is often seen as a port of relative calm during times of economic turmoil or market upheaval, had recently touched record high levels due in large part to uncertainty stemming from Trump’s tariffs.
By 5:20 ET, spot gold had tumbled by 2.7% to $3,235.00 an ounce, while gold futures had shed 3.1% to $3,241.75/oz.
(Scott Kanowsky also contributed to this article)