Stocks are surging after Trump strikes a truce in the US-China trade war

AP Images / Richard Drew

• Stocks surged on Monday after President Donald Trump and Chinese leader Xi Jinping struck a truce in the US-China trade war.
• Trump agreed to ease restrictions on Chinese tech giant Huawei's US technology purchases and hold off on extending tariffs to virtually all Chinese good, while Xi pledged to buy an unspecified amount of US farm products and resume trade talks.
• "Trump and Xi gave investors what they wanted at the G-20 meeting in Osaka this Saturday: hope," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
• View Markets Insider's homepage for more stories.

  ---

Stocks surged on Monday after President Donald Trump and Chinese leader Xi Jinping struck a truce in the US-China trade war, sending a wave of relief through global markets.

"Trump and Xi gave investors what they wanted at the G-20 meeting in Osaka this Saturday: hope," said
Ipek Ozkardeskaya, senior market analyst at London Capital Group.

Following their Saturday meeting, Trump agreed to ease restrictions on Chinese tech giant Huawei's US technology purchases and hold off on extending tariffs to virtually all Chinese goods. Meanwhile, Xi committed to buy an unspecified amount of US farm products and resume trade talks.

While investors were quick to celebrate, analysts pointed out that previous rounds of tariffs remain in place and Huawei is still blacklisted.

"Nothing has been achieved or conceded at all except an agreement to restart talks and the postponement of the final stage of tariff escalation to a blanket 25%," said Michael Every, senior Asia-Pacific strategist at Rabobank. "Both sides realized that a full-on historic step-up to complete economic confrontation would be too painful right now, so they did what everyone likes to do: they smiled and can-kicked."

Given previous escalations in the trade war, the boost to market sentiment could also prove short-lived.

"The path towards a lasting US-China trade deal remains unclear," said Han Tan, market analyst at FXTM. "The risk of talks falling apart, or another flare-up in tensions, could still rear its ugly head at some point in the future, blindsiding investors yet again."

Here's the market roundup as of 9.20 a.m. (4.20 a.m. ET):

• Asian indexes rose with the Shanghai Composite up 2.2%, the SZSE Component up 3.8%, Japan's Nikkei up 2.1%, and Hong Kong's Hang Seng down 0.3%.
• European equities rallied in morning trading with Germany's DAX up 1.6%, and both Britain's FTSE 100 and the Euro Stoxx 50 up 0.9%.
• US stocks are set to open higher with futures underlying the Dow Jones Industrial Average and S&P 500 up about 1%, and Nasdaq futures up 1.7%.
• Oil prices jumped after Saudi Arabia, Russia, Iraq, and Iran agreed to extend supply cuts until at least the end of this year, according to Reuters. West Texas Intermediate crude rose 2.8% to $60.10, and Brent crude also rose 2.8% to $66.60.
• Gold fell 1.7% t0 $1,390 as investors dropped the safe-haven asset in favor of riskier assets.
• Bitcoin was down 6.6% at 10,977.