China will reduce tariffs on US goods from 125% to 10%, and the US will also reduce tariffs on Chinese goods from 145% to 30%, and these new tariffs will be implemented for 90 days! The tariff war is finally coming to an end!
As soon as this news came out, US stocks surged tonight! Just think about it, when tariffs were high before, many businesses struggled, corporate costs were high, and profits were low. Now that tariffs have been reduced, corporate costs will lower, and profit margins will increase, so how can US stocks not rise?
However, there are also some regrettable aspects. Tariffs can be canceled, and the market can recover, but many people sold their stocks early or cleared their positions because the market was not good. Now, even if the market improves, those positions cannot be recovered, which is really a pity.
Next, the market is likely to start speculating about interest rate cuts again. With tariffs down and the economic environment improving, everyone will expect interest rates to also decrease, making corporate loans cheaper and giving consumers more motivation to spend, which is another potential benefit for the stock market. Let's wait and see how the market develops in the future, and hopefully, it will get better and better!