US-China Tariff Deal Triggers Market Rally: Dow Jumps 1,000 Points, Tech and Luxury Goods Stocks Lead Gains

Taiwan • Business • 05/12 14:57
US-China Tariff Deal Triggers Market Rally: Dow Jumps 1,000 Points, Tech and Luxury Goods Stocks Lead Gains

On May 12, 2025, the United States and China reached an agreement in Geneva, with both parties agreeing to reduce tariffs on each other's goods by 115 percentage points within the next 90 days. U.S. tariffs on Chinese goods will decrease from 145% to 30%, while Chinese tariffs on U.S. goods will drop from 125% to 10%. This move signifies a cooling down of the trade war, leading to a strong reaction in global financial markets. The three major U.S. stock indices increased, with the Dow Jones Industrial Average surging over 1,000 points. Technology and luxury goods stocks led the gains, oil prices increased, and safe-haven assets such as gold and the yen fell.

Key Updates

05/13 06:59

Due to the new US tariff policy, Samsung is increasing DRAM prices: DDR4 by 20% and DDR5 by 5%. Companies are stocking up in advance, boosting demand.

In May 2025, Samsung Electronics agreed with major clients to raise DRAM prices due to new upcoming US tariff policies, with DDR4 increasing by 20% and DDR5 by 5%. This move was driven by companies stocking up in advance, which increased demand. SK Hynix and Micron also adjusted their prices simultaneously, indicating supply chain and policy pressures in the DRAM market. These adjustments reflect changes in market demand and suppliers' strategic responses.

05/12 21:54

Customs duty revenue in the United States reached a record high of $16 billion in April 2025, easing the pressure on the budget deficit.

In April 2025, the U.S. federal government's customs revenue reached $16 billion, a 130% increase from the same period last year, setting a new monthly high for the past decade. This growth was primarily driven by the Trump administration's 'across-the-board 10% tariff' and significant punitive tariffs on China. This revenue boosted the April budget surplus to $258.4 billion, a 23% increase from the previous year, partially easing the budget deficit pressure.

05/12 21:30

In April, the U.S. budget surplus grew by 23% to $258 billion, as customs revenue hit a record high.

The U.S. Department of the Treasury released data on May 12, 2025, indicating that the federal government's budget surplus for April 2025 was $258 billion, a 23% increase from the same period last year. This growth was primarily driven by a surge in tax revenue and customs duties before the close of the tax season. Customs revenue in April was $16 billion, marking a record high, and was linked to the high tariff policies the U.S. imposed on China and other countries.

05/12 21:30

The new US tariff policy will significantly increase new car prices by April 2025.

In April 2025, new car prices in the United States increased due to a 25% import tariff, with the average transaction price rising by 2.5% compared to March, making it the second highest for the same period in nearly a decade. The tariff has affected imported vehicles from multiple countries, driven by consumer expectations and supply chain pressures. Some manufacturers, such as Ford, have already increased prices on models made in Mexico. Automakers like Nissan and Toyota are adjusting their production strategies to deal with the tariff impact. The UK has obtained lower tariff treatment, while countries such as Japan are facing negotiation challenges. Prices are likely to rise further in the coming months.

05/12 18:56

US-China Tariff Deal Sparks Market Rally: Tesla's Valuation Hits $1 Trillion Again, Foreign Investment Pours into Asian Stocks

On May 12, 2025, the US and China reached a tariff agreement in Geneva, suspending certain punitive tariffs for 90 days to alleviate the trade war. This action triggered a global market response, causing Tesla's stock price to soar and its market value to return to $1 trillion. Foreign capital flowed back into emerging Asian markets, resulting in a net purchase of $4.21 billion within a single week. The Taiwan stock market attracted $2.74 billion, hitting a new high for 2025, while Vietnam's VN-Index rose by 3.3%. Reports analyzed the market impact of this reduction in trade tensions.

05/12 14:57

US-China Tariff Deal Triggers Market Rally: Dow Jumps 1,000 Points, Tech and Luxury Goods Stocks Lead Gains

On May 12, 2025, the United States and China reached an agreement in Geneva, with both parties agreeing to reduce tariffs on each other's goods by 115 percentage points within the next 90 days. U.S. tariffs on Chinese goods will decrease from 145% to 30%, while Chinese tariffs on U.S. goods will drop from 125% to 10%. This move signifies a cooling down of the trade war, leading to a strong reaction in global financial markets. The three major U.S. stock indices increased, with the Dow Jones Industrial Average surging over 1,000 points. Technology and luxury goods stocks led the gains, oil prices increased, and safe-haven assets such as gold and the yen fell.

05/12 12:25

Toyota Faces Pressure from U.S. Tariffs: Strategic Decisions Between Local Production and the Japanese Supply Chain

Starting in 2024, the United States will impose a 25% tariff on imported cars, causing a major impact on Toyota. On May 8, 2025, Toyota President Koji Sato stated that the tariff had already led to a $1.3 billion loss within just two months. Toyota is faced with the choice between maintaining its supply chain in Japan and accelerating overseas production. This decision affects 60,000 small and medium-sized enterprises in Japan. Although Toyota already has 11 factories in the U.S., their capacity is nearly saturated, making it challenging to completely transition to local production. Toyota is considering diversifying its export markets to cope with the uncertainty in the U.S. market.

05/12 10:59

The White House is speeding up efforts on 24 trade agreements, and the grace period for Trump's reciprocal tariffs is set to expire in early July.

The 90-day grace period for President Trump's "reciprocal tariff" policy will expire in early July, and the White House is accelerating the push for negotiations on 24 trade agreements. White House National Economic Council Chairman Hassett stated that many of these agreements are modeled after the US-UK agreements and have reached the final stages of negotiation. Countries are striving to complete negotiations before the end of the grace period to avoid high tariffs. Trump has personally intervened in the negotiations, and the timeline for announcing the agreements is closely aligned with the tariff policy deadline.

05/12 10:25

2025 U.S. CPI Report: Trump Tariffs Unexpectedly Slow Inflation, Drawing Attention from Economists

The U.S. Consumer Price Index (CPI) report for April of 2025 is about to be released, with inflation expected to stay at 2.4% and core CPI at 2.8%. Despite the Trump administration's imposition of tariffs up to 145% on countries such as China, economists note that these tariffs have temporarily suppressed inflation. This situation has caught the attention of both the market and policymakers, with the Federal Reserve opting to take a wait-and-see approach. Economists caution that inflationary pressures could surface in the next few months, with core CPI possibly climbing to 4% by year's end.

05/12 10:25

Yi-Tsai Yen, General Manager of T3EX: Global container shipping rates are rebounding, and shipping companies are adopting strategies for steady capacity management.

On May 12, Yen Yi-Tsai, General Manager of T.S. Lines, stated that global container shipping rates have stopped falling and are rising again, with expectations that they will continue to rise in the third and fourth quarters. Progress in the US-China tariff negotiations has helped restore market confidence, and the rebound in shipping rates is closely tied to changes in tariff policies. Shipping companies, flush with cash, have shifted their strategy to maintaining stable capacity and are no longer slashing prices to compete for cargo. With US retailers holding low inventory levels, a wave of restocking is expected to push shipping rates higher. Key factors influencing shipping rates include tariffs, the US dollar, US Treasury bonds, and geopolitical risks.

Details of the US-China Tariff Agreement Revealed

According to a joint statement released by both parties in Geneva, the US and China will temporarily reduce reciprocal tariffs by 115 percentage points in total starting May 14, for a period of 90 days. US tariffs on Chinese goods will decrease from 145% to 30%, retaining a 20% punitive tariff and a 10% base rate related to the fentanyl issue. China will reduce tariffs on US goods from 125% to 10% and simultaneously cancel 91% of the retaliatory tariffs, suspending 24% of the original 34% reciprocal tariffs.

US Treasury Secretary Scott Bessent stated that this agreement is a clear signal that both parties are unwilling to decouple and emphasized that mechanisms have been established to prevent future tariff increases. Chinese Vice Premier He Lifeng described the talks as "frank, in-depth, and constructive," laying the foundation for future deepened cooperation.

US Stocks Strongly Rebound, Led by Tech and Semiconductor Stocks

Following the announcement, US stocks surged significantly at the opening on May 12. The Dow Jones Industrial Average soared over 1,000 points at one point, closing at 42,278.62 points, up 2.50%. The S&P 500 Index rose 2.69% to 5,812.29 points, while the Nasdaq Composite Index jumped 3.52% to 18,559.61 points. Nasdaq 100 Index futures, dominated by tech stocks, rose over 4% in pre-market trading.

Tech stocks were the biggest winners in this rebound. Apple (AAPL) rose nearly 5%, Amazon (AMZN) increased by over 7%, Tesla (TSLA) and Nvidia (NVDA) rose 7.7% and 5.1%, respectively. TSMC ADR rose 5.89% to $186.91 per share, and the Philadelphia Semiconductor Index surged 6.05% to 4,736.75 points.

Analysts pointed out that the tech industry is highly dependent on the US-China supply chain, and the tariff reduction helps lower costs and supply chain pressure, encouraging investors to return to this sector.

Luxury and Consumer Stocks Rise as Well

In addition to tech stocks, luxury and consumer stocks also saw significant increases. LVMH rose 7%, Burberry increased by 6%, and Hermès rose 4%. These brands are highly dependent on the Chinese market and supply chain, and the tariff reduction helps restore cross-border trade and consumer confidence.

Retail giant Amazon also benefited from this positive trend, with its stock price increasing by over 8%. According to surveys, over 70% of products on the Amazon platform come from China, and the tariff reduction will directly improve its cost structure.

Oil Prices Rise, Energy Stocks Boosted

The easing of the trade war also warmed up the crude oil market sentiment. West Texas Intermediate (WTI) crude oil rose 3.51% to $63.16 per barrel, while Brent Crude rose 3.27% to $66.00 per barrel. Analysts pointed out that improved expectations for global economic growth and energy demand are the main drivers of rising oil prices.

Energy stocks rose in tandem, with major oil company stocks generally increasing. Market participants believe that the easing of trade tensions helps stabilize global supply chains and raw material demand, providing support to the energy market.

Safe-Haven Assets Weaken: Gold, Yen, and Bond Prices Fall

In contrast to the rise in risk assets, safe-haven assets saw a significant decline. Gold prices fell 2.89% to $3,247.30 per ounce. The US Dollar Index rose to 101.37, the yen depreciated by 1.5% against the dollar, and the Swiss franc and euro also weakened.

The yield on the US 10-year Treasury bond rose to 4.467%, reflecting a rebound in market risk appetite, with funds flowing out of the bond market. The Chicago Board Options Exchange Volatility Index (VIX) fell 10%, hitting a new low since the end of March, indicating a significant improvement in market sentiment.

Global Stock Markets Rebound Together

The US-China tariff agreement also led to a simultaneous rise in global stock markets. The pan-European STOXX 600 Index rose 0.7%, and Germany's DAX Index increased by 0.9%, reaching an intraday high. In Asia, the Hang Seng Index in Hong Kong rose 3%, while the Shanghai and Shenzhen stock markets rose 0.8% and 1.7%, respectively, with stocks in Taiwan and South Korea also gaining over 1%.

References

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