U.S. stock index futures jumped on Monday after the United States and China said they had reached a deal to reduce tariffs, easing concerns of an all-out trade war that had gripped global markets.
This "marks a pivotal moment in global trade dynamics," FP Markets' chief analyst, Aaron Hill, said.
"However, the 90-day timeframe indicates these tariff cuts are a negotiation tactic rather than a permanent resolution, creating uncertainty about long-term trade policies."
At 04:08 a.m. ET, Dow E-minis were up 822 points, or 1.99%, S&P 500 E-minis were up 141.75 points, or 2.5% and Nasdaq 100 E-minis were up 666.25 points, or 3.31%.
Futures tied to the Russell 2000 small cap index jumped 3.5%.
The CBOE Volatility index (.VIX), known as Wall Street's fear gauge, briefly slipped below 20 points for the first time since late March. It was last at 20.37 points.
Most megacap and growth stocks firmed in premarket trading, with Nvidia (NVDA.O) jumping 4.6% and Tesla (TSLA.O) adding 6.7%.
Chip stocks like Advanced Micro Devices (AMD.O) and Marvell Technology (MRVL.O) climbed 4.9% and 7.5%, respectively.
Crude oil prices also surged over 3% after the U.S.-China announcement, lifting shares of top producers Chevron (CVX.N) and Exxon Mobil (XOM.N) about 2% higher each.
The deal between the United States and China comes days after a U.S.-UK limited trade agreement, easing fears that U.S. President Donald Trump's reciprocal tariffs announced on April 2 would roil global trade and spark a worldwide recession.
As of last close, the S&P 500 (.SPX) had erased almost all of its losses since April 2, helped along by some bright earnings reports and the trade optimism.
Pharmaceutical stocks, however, remained a casualty of tariff worries after Trump said on Sunday he plans to cut prescription prices to the level paid by other high-income countries, an amount he put at 30% to 80% lower.
Pfizer (PFE.N), Eli Lilly (LLY.N) and Johnson & Johnson (JNJ.N) all fell more than 2% each.
Retail giant Walmart (WMT.N), network equipment maker Cisco (CSCO.O) and farm equipment maker Deere (DE.N) are some of the prominent companies set to report results this week.
Retail inflation (CPI) data is due on Tuesday, while producer prices and retail sales will follow two days later.
Several Federal Reserve officials, including Chair Jerome Powell, are slated to make public remarks over the week.
