On May 12, 2025, the United States and China reached a significant agreement to suspend certain tariffs for 90 days following two days of trade talks in Switzerland. This move marks a meaningful step toward easing ongoing trade tensions and opens a window for further negotiations on broader economic and trade issues.

Key Details of the Agreement:

• Tariff Reductions: Both sides agreed to reduce tariffs by 115%. The U.S. will lower tariffs on Chinese imports from 145% to 30%, while China will reduce tariffs on U.S. goods from 125% to 10%.
• Duration: The tariff suspension is set for an initial 90-day period during which both nations will continue talks to resolve deeper disputes.
• Dialogue Mechanism: A permanent dialogue channel has been established, with high-level representatives from both sides tasked with facilitating ongoing discussions and avoiding future escalations.

Market Impact & Outlook

The news has sparked optimism in global markets. U.S. stock futures climbed, with the S&P 500 rebounding from recent losses. In Asia, China’s CSI 300 rose 0.6%, reflecting improving sentiment on trade.

The joint statement issued by both governments is being viewed as a sign of genuine commitment to de-escalation, though investors remain cautious. The limited 90-day window and the challenge of enforcing terms still pose risks. Volatility could resurface if talks stall or if concrete progress is lacking.

Still, this truce offers much-needed relief for equity markets, which have been rattled by months of tariff uncertainty.

CPI Data in Focus

Despite the breakthrough in U.S.-China trade negotiations, many tariffs remain in place, and discussions with other trading partners are still ongoing. As such, the broader economic drag from elevated tariffs continues to be a key concern.

All eyes are now on today’s U.S. Consumer Price Index (CPI) release, which will be a pivotal moment for markets. Given the heightened sensitivity of inflation and growth data to trade-related disruptions, a hotter-than-expected CPI print may reinforce expectations that the Fed will keep interest rates higher for longer, adding pressure to the economic outlook and equity markets.

Conversely, a softer CPI print could fuel optimism for earlier Fed easing and support a risk-on rally, particularly in the SPX500 and NAS100, which have already shown notable resilience amid recent volatility.

In the longer run, inflation trends and macro data will remain central in shaping investor sentiment, Fed policy expectations, and overall market direction.

Outlook for SPX500 & NAS100

Technically, the SPX500 has broken above the key 5700–5800 resistance zone, confirming a return to the bullish territory. While progress in U.S.-China trade talks and upcoming economic data—particularly inflation—could introduce short-term volatility, the broader trend remains upward.

Near-term pullbacks are possible, but as long as the index holds above 5540, the outlook remains constructive. Any retracement toward this level could offer a buy-the-dip opportunity for bullish traders.

The NAS100 continues to demonstrate strong resilience, supported by tech sector strength and optimism surrounding tech-related developments in the U.S.-China trade negotiations.

Key support is now seen around the 20,000 level, with 19,200 as another important level to watch. As long as these supports hold, the bullish bias remains intact, and any pullbacks toward these levels may present renewed buying opportunities.

In Summary: Talk Progress & Data Driven

Global equity markets are showing resilience amid positive signals from both the U.S. and China following their trade dialogue. As usual, U.S. equities tend to maintain a long-term growth trajectory during periods of optimism, and the current momentum suggests the upside could continue.

However, caution remains. Any breakdown in trade negotiations or a more pronounced negative impact from tariffs in upcoming economic data could weigh on sentiment and trigger renewed volatility.