(Reuters) – The S&P 500 hit its highest since early March on Monday as a crucial U.S.-China agreement to slash tariffs put investors worldwide at ease after weeks of uncertainty around the future of global trade.

The Dow Jones Industrial Average rose 2.51% to an over one-month peak at 09:45 a.m. ET, while the Nasdaq Composite gained 3.34% to its highest in more than two months. The S&P 500 advanced 2.53%, surpassing its 200-day moving average for the first time since late March.

The U.S. will cut extra tariffs it imposed on Chinese imports in April this year to 30% from 145% and Chinese duties on U.S. imports will fall to 10% from 125%, the two countries said on Monday. The new measures are effective for 90 days.

Megacaps Jump

Most megacaps jumped, with Nvidia rising 4% and Tesla adding 4.7%. An index of semiconductor stocks also leapt 5.9% to an over two-month high.

Apple shares rose 4.9% after a report said the company was considering raising the prices of its fall iPhone lineup. The stock was last up 6.2%.

“The market has to re-calibrate to what things look like before ‘Liberation Day’ and that looks like a very constructive growing economy,” said Thomas Hayes, chairman at Great Hill Capital LLC.

President Donald Trump’s April 2 tariff announcements, dubbed “Liberation Day”, had raised fears of a global recession and forced many businesses to put big spending decisions on hold.

Since then, however, upbeat earnings reports, Trump’s softening stance on tariffs and a U.S.-UK limited trade agreement have helped both the S&P 500 and the tech-heavy Nasdaq erase all losses incurred following April 2. The blue-chip Dow has recouped nearly all its declines too.

Wall Street’s “fear gauge,” the CBOE Volatility Index, retreated to 19.19 on Monday – a level last observed before the tariff turmoil in April.

All 11 S&P Sub-Sectors Trading Positively

All 11 S&P 500 sub-sectors were trading in positive territory on the day, with consumer discretionary leading gains with a 5.2% jump.

Crude oil prices also surged close to 4% after the U.S.-China announcement, lifting shares of top producers Chevron and Exxon Mobil over 2% each.

“You (will) have a bunch of forced buyers that are going to be in the market playing catch up,” said Great Hill Capital’s Hayes. .

Retail giant Walmart, network equipment maker Cisco and farm equipment maker Deere are among the prominent companies set to report results this week.

Several Federal Reserve officials, including Chair Jerome Powell, are also slated to make public remarks over the week.

Traders expect the Fed to deliver two 25-basis-point rate cuts by the end of 2025, compared with three cuts seen at the start of May, according to data compiled by LSEG.

Advancing issues outnumbered decliners by a 4.83-to-1 ratio on the NYSE and by a 4.34-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and two new low while the Nasdaq Composite recorded 63 new highs and 14 new lows.

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(Reporting by Shashwat Chauhan and Pranav Kashyap in Bengaluru; Editing by Savio D’Souza and Devika Syamnath)