Good morning! Markets can change direction in an instant, particularly when investor sentiment is so volatile. One technical certainty we have this morning: The bull market is back.

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It’s not often the financial press warns of a new Great Depression and celebrates a fresh bull market in the same month.

On Monday, the Nasdaq Composite climbed more than 4%, lifting it 20% off its April lows to officially tip it into bull market territory.

For bears, it marked a stunning reversal from recent pessimism from consumers, institutional investors, and bond markets.

The bulls can thank the sudden tariff détente between the US and China.

To be clear, the US-China trade deal is a tariff pause, not a permanent halt. The following will last for 90 days as negotiations continue:

• Total US tariffs on Chinese goods will drop from 145% to 30%

• Total Chinese tariffs on US goods will drop from 125% to 10%

The agreement marks an important, optimistic shift in the market narrative.

JPMorgan strategist Tai Hui said the agreed upon 90-day negotiation period may need to be extended further, but called the move a productive step.

“We expect the market to get back on to a risk-on sentiment in the near-term,” he wrote in a note.

The sell-off in risk assets clearly had the attention of the White House. Recall that President Trump had acknowledged investors’ nerves in early April, saying bond traders were “getting yippy” and “queasy” at the time.

Yet if pressure from markets raised the stakes for Washington to cut a deal, the same can be said of Beijing.

China faces a different, arguably more pressing set of domestic troubles. President Xi Jinping has been attempting to manage deflation, collapsing factory activity, and faltering consumer demand.

Data out this week revealed factory-gate prices in China have dropped for 31 months in a row.

To Yardeni Research strategists, the nation’s troubling trajectory resembles that of Japan in the 1990s.

That suggests Chinese officials are looking for a tariff deal sooner than later.

“President Trump’s tariffs are a hurricane-force headwind that China hardly needs,” Yardeni strategists told clients early Tuesday. “Even if Trump’s claim that the China tariff will be slashed considerably holds, a 30% import tax is still no joke.”

Whether the tariff pause proves durable or not, it shows that financial markets still hold real geopolitical leverage.

In 90 days, investors will be hard pressed to relinquish that power.

Market snapshot

Elsewhere

💰️ Tariff receipts hit a record $16 billion in April. Total customs duties surged 86% higher than the prior month, and came more than double that $7.1 billion seen a year ago. That brought year-to-date total for the duties to $63.3 billion, more than 18% ahead of the same period in 2024. (CNBC)

💊 Trump’s executive order can reshape the US pharma industry. The White House’s move Monday is set to restructure how Americans buy prescription drugs, pushing them away from insurers and pharmacy-benefit managers and toward cash-pay options. (Barron’s)

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Rapid-fire

• April inflation data comes due this morning at 8:30 AM ET

• Coinbase will join the S&P 500, replacing Discover Financial (CNBC)

• AI startup Perplexity is now valued at $14 billion (WSJ)

• The tariff pause could create a sudden spike in freight shipments and higher prices (CNBC)

• US car prices climbed in April as early effects of tariffs began to take hold (Reuters)

• Amazon stock surged 8% on Monday (WSJ)

• Working remote does not grant employees a proximity dividend (Blog)

Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].