US stock futures rose after the U.S. and China agreed to major reductions in tariffs for 90 days. Nasdaq futures soared 3.5%, S&P 500 up 2.7%, and Dow futures jumped 2.1%.

Big tech stocks jumped in premarket trading on Monday. Tesla rose 8%; Apple, Nvidia, Amazon rose 5%; Meta, TSMC rose 4%; Alphabet rose 3%; Microsoft rose 2%.

Chinese ADRs and ETFs jumped in premarket trading on Monday. YINN rose 10%; XPeng rose 8%; Alibaba, PDD Holdings, and Li Auto rose 7%; JD.com and NIO rose 6%.

The US and China will temporarily lower tariffs on each other’s products, according to a joint statement released in Geneva, in a move to cool trade tensions and give the world’s two largest economies three more months to resolve their differences.

The combined 145% US levies on most Chinese imports will be reduced to 30% including the rate tied to fentanyl by May 14, while the 125% Chinese duties on US goods will drop to 10%, according to the statement and officials in a briefing Monday.

“We had a very robust and productive discussion on steps forward on fentanyl,” Treasury Secretary Scott Bessent said. “We are in agreement that neither side wants to decouple.”

The statement also said “the parties will establish a mechanism to continue discussions about economic and trade relations.”

The announcement represents a step toward de-escalating a tariff war that has led to an immediate slump in trade across the Pacific Ocean. The two countries had earlier reported “substantial progress” in their talks, which buoyed markets and helped Chinese stocks recoup their losses since President Donald Trump’s “Liberation Day” announcement of tariffs on April 2.

Trade Representive Jamieson Greer said the US wants to have more balanced trade with China.

The White House called the agreement a “trade deal” in an initial statement on Sunday, but it is still unclear what an acceptable goal is for both sides or how long it will take to get there. China previously demanded that the US remove all the tariffs it has imposed this year, which is incompatible with the US objective of reducing or ending the trade deficit.

While markets greeted recent reports of progress, history suggests that it could take a long time to reach a detailed agreement, if one is possible. In 2018, the two sides also agreed to put their dispute “on hold” after a round of negotiations, but the US soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the “Phase One” trade deal in January 2020.

In the end, China failed to live up to the purchase agreement in that deal and the US trade deficit with China jumped during the pandemic, setting up the current trade war.