Wall Street Soars as U.S.–China Tariff Truce Sparks Market Rally
On May 13, 2025, the U.S. stock market experienced a powerful rally across all major indices, primarily driven by a surprising yet temporary rollback of trade tariffs between the United States and China. The Dow Jones Industrial Average surged 2.81% to close at 42,410.10, while the S&P 500 gained 3.26%, finishing at 5,844.19, and the Nasdaq Composite rose an impressive 4.35%, ending the session at 18,708.34. This market-wide rebound was sparked by a 90-day trade truce in which both economic superpowers agreed to substantially lower tariffs. The U.S. dropped its tariffs on Chinese goods from 145% to 30%, while China reduced its tariffs on American imports from 125% to just 10%.
This geopolitical thaw alleviated fears of a prolonged trade war, encouraging investors to re-enter risk assets and heavily bid up equities, particularly in the technology and consumer discretionary sectors. Amazon rose 8.04%, Apple jumped 6.22%, Nvidia climbed 5.44%, and Tesla advanced by 5.7%. Meanwhile, Coinbase gained 9.6% following news of its inclusion in the S&P 500, and FedEx was up 1.5% after Amazon announced it would resume last-mile delivery partnerships with the logistics firm. Even Boeing ticked up 0.5% after reports that China would lift delivery restrictions on its aircraft.
On the flip side, healthcare stocks underperformed, weighed down by concerns over margin pressures and policy reforms. UnitedHealth dropped sharply by 10%, with CVS Health (-3.9%), Elevance Health (-5.9%), Humana (-4.5%), and Cigna (-5.28%) also among the day’s worst performers. In other sectors, Newmont Mining (-5.98%) and American Water Works (-5.55%) also saw significant declines, indicating some rotation out of defensive and utility plays as investors embraced higher-beta sectors.
Market sentiment was further buoyed by anticipation of benign inflation data. The Consumer Price Index (CPI) for April is expected to show a 0.3% monthly rise, holding the annual rate steady at 2.4%, suggesting that inflation may not re-accelerate despite a strong labor market. However, certain pockets of inflation remain sticky — particularly in the auto sector, where April saw a 2.5% increase in vehicle prices, which could keep the Federal Reserve cautious. Even so, the tariff de-escalation has temporarily shifted expectations away from further tightening and toward the possibility of a rate cut in the second half of the year, depending on incoming data.
From a macroeconomic standpoint, the tariff rollback has improved short-term visibility and reduced downside risk to global growth and corporate earnings. However, analysts caution that the 90-day truce is not a comprehensive trade agreement and may simply delay deeper structural tensions. Without a permanent resolution, markets could face renewed volatility if negotiations stall or geopolitical tensions re-intensify.
ETF movements mirrored the bullish sentiment. The SPDR S&P 500 ETF Trust (SPY) rose to $582.99, the SPDR Dow Jones Industrial Average ETF (DIA) climbed to $424.23, and Invesco QQQ Trust (QQQ) jumped to $507.85 — all showing gains of over 2.8%. These increases reflect broad-based optimism in equities, particularly in large-cap growth stocks.
In conclusion, today’s market rally was driven by a potent mix of geopolitical relief, improved sentiment around inflation data, and selective corporate catalysts. While this optimism has delivered a strong bounce, investors remain aware that the fundamental issues underlying U.S.-China trade tensions are unresolved, and the durability of this rally will depend on upcoming economic indicators, earnings reports, and the trajectory of global diplomacy.