Topline: Following news that the U.S. and China reached a partial trade agreement on Friday, the stock market sharply rebounded, putting major indexes back within reaching distance of record highs.
- Both major indexes returned to near-record highs on the back of the good news: The S&P 500 was up 1.1% for the day—putting it just 1.9% off its record of 3,027.98, while the Dow Jones Industrial Average rose by 1.2%—about 2.1% off its record of 27,398.68.
Here’s what we know about the partial trade deal, which helped the market snap a three-week losing streak:
- President Trump announced that the U.S. reached a “very substantial phase one deal” with China, setting up a temporary truce that could facilitate the end of the 18-month long trade war.
- As part of the deal, China would agree to buying $40 billion to $50 billion worth of American agricultural products.
- China will also agree to guidelines for more transparaceny in how it manages its currency, with some additional provisions on intellectual property, like technology transfer.
- In exchange, the U.S. will not go ahead with its planned tariff increase of 25% to 30% on $250 billion of Chinese goods, Treasury Secretary Mnuchin confirmed, after what was the 13th round of negotiations between top officials.
- The first portion of the deal will be written over the next few weeks, with phase two to follow immediately after, Trump told reporters.
What to watch for: While the limited agreement is a big breakthrough and resolves some short-term issues, several remain outstanding: such as intellectual-property theft, forced technology transfer, and complaints about Chinese industrial subsidies, according to Bloomberg. Issues relating to the U.S. blacklisting of tech giant Huawei will not be part of Friday’s deal, the administration confirmed.
This article was originally published by Forbes.com. Read the original article here.