Tuesday delivered one of the most explosive single-session rallies of 2026, as the United States and China announced a 90-day pause on the bulk of their retaliatory tariffs — a development that caught many traders flat-footed and sent risk assets soaring across the board. The S&P 500 jumped over 3%, the Nasdaq surged more than 4%, and the Dow climbed nearly 2,800 points on the news, which emerged from weekend talks in Geneva and was formally confirmed before Monday's Asian open.
Technology and semiconductors led the charge. Nvidia climbed more than 7% as investors bet that eased export controls would reopen a critical revenue pipeline into China. Broader chip names including AMD and Broadcom posted gains north of 5%, while Apple — heavily exposed to Chinese manufacturing — rallied over 6% on hopes of supply chain relief.
The VIX fear gauge, which had been stubbornly elevated above 30 for much of April and early May, tumbled to 19.4 — its lowest reading since late February. That drop in volatility itself encouraged more buying, as options market hedges were unwound and institutional money came off the sidelines in size.
Not everything benefited. Gold, which had been a consistent winner during the trade war anxiety, gave back nearly 3% as the safe-haven bid evaporated. Oil edged higher but remained relatively muted, suggesting traders want more evidence of demand recovery before committing fully to the energy trade.