The US and China reached a 90-day mutual tariff reduction agreement, which boosted global markets: US stocks surged by 1,000 points, and Taiwanese ADRs rose across the board.

Taiwan • Business • 05/13 02:26
The US and China reached a 90-day mutual tariff reduction agreement, which boosted global markets: US stocks surged by 1,000 points, and Taiwanese ADRs rose across the board.

On May 12, 2025, the United States and China announced an agreement to mutually reduce tariffs for 90 days, with the United States reducing tariffs from 145% to 30% and China reducing tariffs from 125% to 10%. This move boosted global markets, with all four major U.S. stock indices seeing gains. The Dow Jones Industrial Average jumped 1,160.72 points, and the Philadelphia Semiconductor Index rose by 7.04%. ADRs of Taiwanese companies like TSMC, Micron, and UMC also saw increases, with TSMC ADRs up 5.93%. The market's positive reaction reflects investors' optimism about easing trade tensions.

Key Updates

05/13 18:31

U.S. inflation data falls to a four-year low, European stocks react differently: London edges down, Frankfurt and Paris edge up.

On May 13, 2025, European stock markets had mixed performances after the U.S. April CPI annual growth rate fell to 2.3%. The London FTSE 100 index dipped slightly by 0.02% due to a slowdown in the UK labor market affecting market confidence. Meanwhile, the Frankfurt DAX and Paris CAC 40 indices rose by 0.31% and 0.30%, respectively, boosted by a temporary reduction in tariffs between the U.S. and China and expectations for a rate cut by the European Central Bank. Markets remain cautious about the global economic outlook, reflecting a cautious, wait-and-see attitude amid the interplay of multiple factors.

05/13 17:25

Soft U.S. inflation data and easing U.S.-China trade tensions boost the S&P 500 and Nasdaq.

On May 13, 2025, the U.S. stock market rose due to the annual growth rate of the April CPI dropping to 2.3% and the easing of trade tensions between the U.S. and China. The S&P 500 and Nasdaq indices increased by 0.9% and 1.49%, respectively. The U.S. and China announced a suspension of some tariffs and significantly reduced tariff rates, which boosted market confidence. Technology stocks led the gains, with the Nasdaq entering a technical bull market. The yield on the U.S. 10-year Treasury bond declined, and the dollar index fell, indicating increased expectations of a shift in Federal Reserve policy.

05/13 10:59

Futures for the three major U.S. stock indices simultaneously declined: Dow futures fell more than 90 points as investors pay attention to inflation data.

On the afternoon of May 13, 2025, futures for the three major U.S. stock indices declined. Dow Jones Industrial Average futures dropped 93 points to 42,400, S&P 500 futures fell 19.25 points to 5,845.75, and Nasdaq 100 futures decreased 85.75 points to 20,863. The market was cautious ahead of the U.S. stock market opening, as investors focused on upcoming U.S. inflation data and economic indicators, which could impact the Federal Reserve's interest rate policy.

05/13 06:59

U.S. stock index futures decline: Market sentiment is cautious after the trade agreement, and the three major indices pull back from their highs.

After the US and China announced a 90-day tariff suspension agreement, US stocks surged early in the week. However, as of 1:30 PM Taipei time, May 13, 2025, US stock index futures retreated. Dow Jones Industrial Average futures fell 104 points to 42,389, S&P 500 futures dropped 20.5 points to 5,844.5, and Nasdaq 100 futures decreased 88.75 points to 20,860. Market sentiment turned cautious as investors reassess the real impact and risks of the trade agreement.

05/13 02:58

Shift in Trump's Tariff Policy: Taiwan Stock Market Rebounds Strongly, New Taiwan Dollar Sees Significant Volatility

Since April 2025, the Taiwan stock market has strongly rebounded, and the exchange rate of the New Taiwan Dollar against the US Dollar has fluctuated dramatically due to President Trump's adjustment of reciprocal tariff policy. On May 12, the US and China announced a significant tariff reduction to be implemented within 90 days, with US tariffs on Chinese goods reduced to 30% and Chinese tariffs on US goods reduced to 10%. This move alleviated global trade tensions and boosted the performance of the Taiwan stock market and the New Taiwan Dollar. Financial author Chen Chongming stated that although exchange rate fluctuations affect short-term returns, he remains confident in the long-term prospects of the semiconductor industry.

05/13 02:26

The US and China reached a 90-day mutual tariff reduction agreement, which boosted global markets: US stocks surged by 1,000 points, and Taiwanese ADRs rose across the board.

On May 12, 2025, the United States and China announced an agreement to mutually reduce tariffs for 90 days, with the United States reducing tariffs from 145% to 30% and China reducing tariffs from 125% to 10%. This move boosted global markets, with all four major U.S. stock indices seeing gains. The Dow Jones Industrial Average jumped 1,160.72 points, and the Philadelphia Semiconductor Index rose by 7.04%. ADRs of Taiwanese companies like TSMC, Micron, and UMC also saw increases, with TSMC ADRs up 5.93%. The market's positive reaction reflects investors' optimism about easing trade tensions.

05/12 18:26

Truce in the US-China trade war sparks market volatility: Maersk's stock price soars, Novo Nordisk's stock price plummets, Trump announces Apple and TSMC will make substantial investments in the United States.

On May 12, 2025, the US and China announced a 90-day suspension of most tariffs, leading to a swift reaction in global markets. Maersk's stock price surged by 14%, becoming the biggest gainer in the Stoxx 600 index; Novo Nordisk's stock plummeted by 8.6% due to US policies aimed at lowering drug prices. Trump announced that Apple would invest $500 billion, and TSMC's investment would increase to $300 billion. At the US investment summit, Taiwanese companies considered relocating part of their supply chain to the US to adapt to policy changes.

05/12 14:26

Apple is planning to increase the price of the new iPhone, while remarks by Trump regarding investments and the US-China tariff ceasefire are driving a strong rebound in US stocks.

On May 12, 2025, Apple plans to increase the prices of the new iPhone series set to launch in the fall, without attributing the increase to US-China trade tariffs. Investment advice from U.S. President Trump and the 90-day temporary mutual tariff reduction agreement between the U.S. and China has driven a rebound in the U.S. stock market, with the S&P 500 index rising 14%. Apple's stock price increased by more than 7% in pre-market trading, driven by progress in trade negotiations.

05/12 07:00

On May 12, 2025, U.S. stock futures rose across the board: Dow futures, S&P futures, and Nasdaq futures rose simultaneously in the Asian trading session.

On May 12, 2025, futures for the three major U.S. stock indices increased during the Asian trading session. As of 1:34 PM Taipei time, Dow Jones futures increased by 446 points to 41,769, a rise of 1.08%; S&P 500 futures increased by 82.25 points to 5,760.25, a rise of 1.45%; Nasdaq 100 futures increased by 394.25 points to 20,531, a rise of 1.96%. This upward trend reflects the market's response to the international economic and trade conditions, setting a positive tone for the U.S. stock market's opening.

05/12 02:59

On May 12, 2025, U.S. stock index futures rose, with the Dow Jones Industrial Average at 41,770, the S&P 500 climbing to 5,759.75, and the Nasdaq 100 reaching 20,542.

On May 12, 2025, at 9:30 AM local time, the three major U.S. stock futures rose. The Dow Jones Industrial Average futures increased by 447 points to 41,770, the S&P 500 futures rose by 81.75 points to 5,759.75, and the Nasdaq 100 futures climbed by 405.25 points to 20,542. Progress in U.S.-China trade negotiations boosted the upward trend, reflecting investor confidence in the market, especially in the strong performance of technology stocks.

US-China Tariff Suspension Agreement Sparks Market Optimism

According to a joint statement released by the United States and China on May 12, both parties have agreed to mutually reduce import tariffs on goods over the next 90 days. The US will significantly lower the average tariff rate on Chinese goods from 145% to 30%, while China will reduce tariffs on US goods from 125% to 10%. This agreement was reached after high-level trade talks in Geneva and is regarded as a significant breakthrough in bilateral trade relations.

US Treasury Secretary Scott Bessent said in an interview with the media that the agreement is part of a "strategic decoupling" aimed at reducing reliance on China in critical industries while avoiding a full-blown economic confrontation. He emphasized that both sides will continue negotiations in the coming weeks and may finalize a more long-term trade arrangement.

Major US Stock Indices Rise, Led by Tech Stocks

Spurred by the agreement, major US stock indices rose across the board on Monday. The Dow Jones Industrial Average surged 1,160.72 points, or 2.81%, to close at 42,410.10 points. The S&P 500 Index rose 184.28 points, or 3.26%, to close at 5,844.19 points. The Nasdaq Index jumped 779.43 points, or 4.35%, to close at 18,708.34 points, reaching a new high since February 28.

Tech stocks stood out with strong performance. The Philadelphia Semiconductor Index soared 314.43 points, or 7.04%, to close at 4,780.93 points, with all 30 component stocks rising. TSMC ADR rose 5.93%, ASML increased 6.23%, AMD rose 5.13%, Texas Instruments surged 8.71%, Qualcomm rose 4.78%, Applied Materials increased 7.96%, and Arm Holdings also rose 7.78%.

Major tech stocks also ended the day in positive territory. Apple's stock price rose 6.31% to close at $210.79; Tesla surged 6.75% to close at $318.38; Amazon soared 8.07%, Meta rose 7.92%, Nvidia closed up 5.44%, and Microsoft and Alphabet rose 2.4% and 3.37%, respectively.

Taiwanese Stock ADRs Climb Alongside the US Stock Market, Led by TSMC

Taiwanese stock ADRs climbed alongside the US stock market, indicating renewed market confidence in Taiwan's tech sector. According to reports from China Times and United Daily News, TSMC ADR closed up 5.93% at $186.96, equivalent to NT$1,135.12 per share, a premium of 18.61% over the Taipei stock market closing price.

ASE Technology Holding ADR performed even stronger, soaring 6.8% to close at $9.865; UMC ADR also rose 3.49% to close at $7.71. These increases reflect investor optimism about the future of the semiconductor supply chain, especially in the context of temporarily lifted trade barriers.

Market Reaction and Background Factors

The market's rebound was fueled not only by tariff policy but also by expectations of US domestic economic policy. Although the likelihood of a Federal Reserve rate cut has recently decreased, the market remains optimistic about easing inflation pressures and the outlook for corporate profits. The yield on the US 10-year Treasury note rose to 4.469%, indicating renewed market confidence in economic growth.

Additionally, according to Metal News, defensive stocks such as Coca-Cola, AT&T, and Philip Morris saw declines, suggesting a shift of funds from defensive assets to growth and cyclical stocks.

References

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