The US and China have reached a trade agreement aimed at easing tensions and boosting market stability. The deal, effective May 12, 2025, cuts tariffs on goods from both countries, with a 90-day tariff reduction period. While this short-term measure is seen as positive for the financial markets, particularly the S&P 500 which saw gains following the announcement, lingering concerns remain regarding Moody’s potential credit rating downgrade of the US economy. The deal itself is intended to foster more stability and market confidence, although a long-term assessment is yet to be made. Discussions are already underway on potentially modifying reciprocal tariffs with China in order to further stabilize economic connections. While this agreement offers hope for improved investor sentiment, the impact remains dependent on future negotiations and broader economic developments