Vipshop (VIPS) stock soared 5.28% in pre-market trading on Monday, riding the wave of optimism following a significant breakthrough in US-China trade relations. The surge comes as part of a broader rally in Chinese stocks and American Depositary Receipts (ADRs) after the two economic powerhouses agreed to major reductions in tariffs.

The United States and China have announced a temporary lowering of tariffs on each other's products, according to a joint statement released in Geneva. This move aims to cool trade tensions and provides a 90-day window for further negotiations. As a result, Chinese ADRs and ETFs have seen substantial gains, with some rising by as much as 11%. The news has particularly benefited e-commerce companies like Vipshop, as reduced tariffs could potentially lead to increased cross-border trade and improved business prospects.

Under the agreement, the combined 145% US levies on most Chinese imports will be reduced to 30%, while the 125% Chinese duties on US goods will drop to 10%. This development represents a significant step towards de-escalating the ongoing trade war and has sparked a rally across global markets. While the long-term implications remain to be seen, investors are clearly optimistic about the potential for improved US-China economic relations and the positive impact this could have on companies like Vipshop that operate in the Chinese market.