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Indexes rise: Dow 2.51%, S&P 500 2.53%, Nasdaq 3.34%

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US, China reach deal to cut tariffs

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Apple ( AAPL ) rises on report of considering raising iPhone prices

(Updates after market open)

By Shashwat Chauhan and Pranav Kashyap

May 12 (Reuters) - The S&P 500 hit its highest since

early March on Monday as a crucial U.S.-China agreement to slash

tariffs put investors worldwide at ease after weeks of

uncertainty around the future of global trade.

The Dow Jones Industrial Average rose 2.51% to an

over one-month peak at 09:45 a.m. ET, while the Nasdaq Composite

gained 3.34% to its highest in more than two months. The

S&P 500 advanced 2.53%, surpassing its 200-day moving

average for the first time since late March.

The U.S. 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.

Most megacaps jumped, with Nvidia ( NVDA ) rising 4% and

Tesla adding 4.7%. An index of semiconductor stocks

also leapt 5.9% to an over two-month high.

Apple ( AAPL ) shares rose 4.9% after a report said the

company was considering raising the prices of its fall iPhone

lineup. The stock was last up 6.2%.

"The market has to re-calibrate to what things look like

before 'Liberation Day' and that looks like a very constructive

growing economy," said Thomas Hayes, chairman at Great Hill

Capital LLC.

President Donald Trump's April 2 tariff announcements,

dubbed "Liberation Day", had raised fears of a global recession

and forced many businesses to put big spending decisions on

hold.

Since then, however, upbeat earnings reports, Trump's

softening stance on tariffs and a U.S.-UK limited trade

agreement have helped both the S&P 500 and the tech-heavy Nasdaq

erase all losses incurred following April 2. The blue-chip Dow

has recouped nearly all its declines too.

Wall Street's "fear gauge," the CBOE Volatility Index

, retreated to 19.19 on Monday - a level last observed

before the tariff turmoil in April.

All 11 S&P 500 sub-sectors were trading in positive

territory on the day, with consumer discretionary

leading gains with a 5.2% jump.

Crude oil prices also surged close to 4% after the

U.S.-China announcement, lifting shares of top producers Chevron ( CVX )

and Exxon Mobil ( XOM ) over 2% each.

"You (will) have a bunch of forced buyers that are going to

be in the market playing catch up," said Great Hill Capital's

Hayes. .

Retail giant Walmart ( WMT ), network equipment maker Cisco ( CSCO )

and farm equipment maker Deere are among the

prominent companies set to report results this week.

Several Federal Reserve officials, including Chair Jerome

Powell, are also slated to make public remarks over the week.

Traders expect the Fed to deliver two 25-basis-point rate

cuts by the end of 2025, compared with three cuts seen at the

start of May, according to data compiled by LSEG.

Advancing issues outnumbered decliners by a 4.83-to-1 ratio

on the NYSE and by a 4.34-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and two new low

while the Nasdaq Composite recorded 63 new highs and 14 new

lows.