Dollar Soars as Tariff Truce Reignites Global Market Rally

​The U.S. dollar surged and government bonds sold off Monday as investors cheered a surprise breakthrough in trade negotiations between the U.S. and China. The two global giants agreed to temporarily reduce tariffs for 90 days—a truce that helped reset market sentiment after weeks of economic uncertainty. The dollar index jumped as much as 0.9%, while traditional safe-haven currencies like the yen and euro slid. Meanwhile, the yield on the U.S. 10-year Treasury spiked to 4.45%, its highest in nearly a month, as traders dialed back expectations for aggressive interest rate cuts by the Fed.

Stocks responded in kind, with Nasdaq 100 futures jumping nearly 4% and S&P 500 futures rising over 3%. Shipping and auto stocks led the rally in Europe, with major players like Maersk and Hapag-Lloyd soaring double digits. Market strategist Nigel Green called the coordinated tariff relief a "major pivot point," opening the door for businesses to reset forecasts and for investors to rally on something more substantial than just hope.

​Even with all the euphoria, some analysts urged caution. While the tariff rollback bought time, they noted that longer-term risks to U.S. assets remain, particularly with potential shifts in global asset allocation away from dollar-based holdings. Still, for now, the market is embracing the ceasefire, and the greenback is riding high on renewed confidence and eased recession fears.