U.S. stock index futures jumped on Monday after the United States and China reached a deal to reduce tariffs, signaling a truce in a punishing trade war that had kept markets on edge for weeks.

The United States will cut extra tariffs it imposed on Chinese imports in April this year to 30% from 145% and Chinese duties on U.S. imports will fall to 10% from 125%, the two countries said on Monday. The new measures are effective for 90 days.

Market Snapshot

At 8:42 a.m. ET, Dow Jones Industrial Average futures gained 1,121 points, or 2.7%. S&P 500 futures climbed 3.2%, and Nasdaq-100 futures surged 4.1%.

Pre-Market Movers

Amazon.com jumped 8.6%, Meta Platforms, Inc. rose 6.5%, Apple rose 6.4%, NVIDIA gained 4.5%, and the remainder of the Magnificent Seven stocks traded higher following the U.S.-China trade deal. Wedbush analyst Dan Ives said the agreement was "very bullish news for the tech trade as the supply chain concerns will now be significantly reduced." Ives said "new highs for the market and tech stocks are now on the table in 2025 as investors will likely focus on the next steps in these trade discussions which will happen over the coming months."

Tesla Motors, another member of the Magnificent Seven, rose 8.1% in premarket trading. The electric-vehicle maker's most productive car plant is located in China, and the country accounted for 22% of total revenue last year.

U.S.-listed shares of Chinese companies also were rising significantly. Alibaba gained 6%, JD.com was up 6.1%, Baidu rose 4.2%, and PDD Holdings Inc soared 6%.

Eli Lilly declined 3%, Pfizer fell 1.9%, Merck was down 2.2%, and Bristol-Myers Squibb declined 1.6% after President Donald Trump said he would sign an executive order that would reduce the cost of drugs in the U.S. Trump's plan brings back a proposal from his first term, the so-called most-favored nation drug policy.

Newmont Mining, the gold miner, was falling 5.6% as the precious metal tumbled 3.8% after the U.S. and China announced a deal to cut tariffs on each other's goods and investors abandoned safe-haven assets.

Monday.com Ltd. was 3.5% after the software company reported first-quarter earnings and revenue that beat Wall Street estimates. Monday.com also said it now expects full-year revenue of between $1.22 billion and $1.23 billion, compared with the range of $1.21 billion to $1.22 billion the company predicted when it disclosed its fourth-quarter earnings.

Market News

U.S. and China Likely to Meet in “a Few Weeks” to Work on a More Permanent Deal, Bessent Says

The meetings between the U.S. and China in Switzerland produced a mechanism to negotiate a more permanent agreement and to prevent the ratcheting up of tariffs that took place soon after President Donald Trump's April 2 tariffs, Treasury Secretary Scott Bessent said Monday in an interview on CNBC.

"The good thing is we had a plan, and we had a process...Now we have a mechanism for further negotiations," he said. "I imagine in the next few weeks we'll meet again to get rolling on a more permanent agreement."

The interview followed the agreement that the two countries negotiated over the weekend to slash their steep tariffs for 90 days. The U.S. will cut its additional tariffs on China to 30% from 145%, while China will reduce its tariffs on U.S. imports to 10% from 125%. Tariffs on Chinese goods that were in place before April 2 will remain, Bessent said.

Apple Surges After Report of Plans to Raise Prices of iPhones

Apple is thinking of raising the prices of its fall iPhone lineup, a measure the U.S. tech giant is seeking to couple with new features and design changes, The Wall Street Journal reported, citing people with knowledge of the matter.

Shares of Apple jumped about 6% premarket on Monday.

Apple is determined to avoid any scenario in which it seems that the price increases are due to U.S. tariffs on goods from China, where most of the company's devices are assembled, the report added.

Trump to Sign Drug Pricing Executive Order, Promises 59% Cut

U.S. President Donald Trump plans to sign an executive order on prescription drug pricing on Monday that aims to align the United States with what other countries pay, a move he said on social media would be a cut of 59%.

His new estimate followed comments he made on Sunday, when he said on social media that he would sign the order pursuing "most favored nation" pricing, resulting in cuts of 30% to 80%.

Shopify Soars After Being Added to the Nasdaq 100 Index

Nasdaq announced on Monday that Shopify Inc. will become a component of the Nasdaq-100 Index and the Nasdaq-100 Equal Weighted Index before the opening of the market on May 19. The e-commerce company will replace MongoDB Inc. in the Nasdaq-100 Index and the Nasdaq-100 Equal Weighted Index.

Shares of Shopify jumped 12% in premarket trading.