Equity ETFs soared after the U.S. and China agreed to roll back tariffs for 90 days, potentially signaling the end of a trade war that had roiled markets since President Donald Trump launched the battle six weeks ago.
The world’s largest exchange-traded fund, the $621.5 billion Vanguard S&P 500 ETF (VOO), jumped 2.7%. That fund is now above its April 2 “Liberation Day” price. The SPDR Gold Trust (GLD) fell 3.1%, a small dent to the 27% gain so far this year, while the iShares 20+ Year Treasury Bond ETF (TLT) lost 0.6% as investors bet on growth over safety.
Under the agreement hatched during negotiations in Switzerland, the U.S. cut tariffs on Chinese imports temporarily to 30% from 145% while Beijing reduced duties imposed on U.S. goods to 10% from 125%. The changes take place Wednesday.
Markets have tumbled this year, businesses altered plans and consumer sentiment dropped as the Trump administration took aim at imports with a mix of threats and actual tariffs.
Today’s jump in the S&P 500 was its biggest since the 9.5% gain on April 9, days after stocks briefly dipped into bear market territory as the trade war escalated. While investors have moved money into safer bets such as gold ETFs in recent weeks—pushing the precious metal to record highs—they’ve still poured a net $8.5 billion into VOO over the past month through Friday on hopes for a market rebound.
The iShares China Large-Cap ETF (FXI) gained 3.3%.
Retail ETFs also jumped, including a 4.6% gain in the $437.7 million SPDR S&P Retail ETF (XRT), on expectations that the tariffs won’t boost the costs to consumers for budget Chinese goods. XRT holds equities in companies including Dollar General Corp. (DG), Dollar Tree Inc. (DLTR) and National Vision Holdings Inc. (EYE).
Pharma ETFs were mixed after President Trump said he’ll take steps to control drug prices. The $138.5 million VanEck Pharmaceutical ETF (XPH) rallied 1.7% after an earlier decline, while the $235.1 million Invesco Dynamic Pharmaceuticals ETF (PJP) rose 2.2% after a morning dip.
India ETFs gained after that country and Pakistan stopped shelling each other following a truce that aimed to calm tensions between the nuclear-armed countries, who had been attacking each other since late April. The $8.8 billion iShares MSCI India ETF (INDA) gained 3.5%.
