US benchmark equity indexes closed higher on Monday after the U.S. and China agreed to suspend most tariffs on each other's goods.

The Nasdaq gained 4.4% to 18,708.34, the S&P 500 increased 3.3% to 5,844.19, and the Dow Jones Industrial Average advanced 2.8% to 42,410.1. Among sectors consumer discretionary posted the biggest gain, while utilities had the lone decline.

US Treasury yields rose with the 10-year rate increasing 9.2 basis points to 4.5% and the two-year rate gaining 9.8 basis points to 4%.

June West Texas Intermediate crude oil increased 1.7% to $62.05 a barrel.

In economic news, the US and China reached an agreement on a 90-day suspension of reciprocal duties following their talks in Switzerland over the weekend. The two sides had been in a trade war since President Donald Trump's announcement of sweeping new tariffs early last month.

US Treasury Secretary Scott Bessent said he expects to meet with Chinese officials again "in the next few weeks" to continue trade negotiations, CNBC reported.

The tariff cuts likely take a recession "off the table for now," Wedbush Securities said in a note.

Oxford Economics said that "though the pause is temporary and risks to the outlook because of tariffs remain weighted to the downside, the agreement implies less of a drag on the economy through the rest of this year from three of the four shocks hitting it."

Federal Reserve Governor Adriana Kugler said that tariffs are "likely to generate significant economic effects," even if they are not raised from their current rates, including higher inflation and slower growth.

In company news, Apple (AAPL) shares jumped 6.3%. The company is planning to use a battery management mode powered by artificial intelligence for iOS 19, an iPhone software update due in September, Bloomberg reported. Separately, company is evaluating higher prices for its next iPhone lineup, the Wall Street Journal reported.

NRG Energy (NRG) shares surged 26%, the biggest gain on the S&P. The company said agreed to acquire power assets from LS Power Equity Advisors for $12 billion in cash and stock.

President Donald Trump signed an executive order aiming to reduce US prescription drug prices by aligning them with lower international rates and indicated intent to eliminate the role of pharmacy benefit managers. Shares of Pfizer (PFE), Merck (MRK), AbbVie (ABBV) and Eli Lilly (LLY) rose, while UnitedHealth Group (UNH), CVS Health (CVS) and Cigna (CI), the -- owners of the three largest PBMs -- fell.

Gold decreased 3.2% to $3,238.30 per troy ounce, while silver was down 0.2% to $32.76 per troy ounce.