US Market's Epic Comeback

US stocks have staged an epic comeback, erasing $8 trillion of losses in what has become the fastest recovery pace since the 1980s.

- WILSON SY

The tech-heavy Nasdaq 100 now stands two percent higher for the year as of Friday's close, while the broader S&P 500 has climbed back into positive territory with a 1.3 percent gain. The sharp reversal comes after both indexes had briefly plunged into bear market territory.

Trade truce boosts market sentiment

The catalyst for the market's historic turnaround is the breakthrough in US-China trade relations. The trade talks held in Geneva on May 10-11 between US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng resulted in a significant de-escalation of tensions. The negotiations produced a 90-day tariff rollback that took effect Wednesday, slashing US duties on Chinese goods from 145 percent to 30 percent, while China reduced its tariffs on American products from 125 percent to 10 percent. The virtual embargo between US and China has been avoided.

Investors embrace diplomatic progress

Markets responded positively to the statement released May 12. This outlined plans for a new consultation mechanism and China's commitment to ease certain non-tariff measures, including export restrictions on critical rare earth minerals. Investors have embraced what officials from both countries are calling a "truce" to prevent further economic decoupling.

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