The European carbon market jumped to seven weeks high on Monday morning as trade tensions ease according to a joint statement just released by the United States and China, following maraton negotiations over the weekend.

For an initial 90-day period, both sides have agreed to cut reciprocal tariffs by 115%. The US slashes tariffs on Chinese goods from 145% to 30% while China cuts tariffs on US goods from 125% to 10%.

Although it’s only a temporary measure, the announcement has triggered a significant surge in global markets, fueled by rising optimism over reduced economic tensions between the world’s two largest economies.

In the United States, S&P 500 futures have climbed by 2.8%, while the Dow Jones Industrial Average has advanced nearly 2.3%, reflecting strong investor confidence. European markets are mirroring this positive momentum, with major indices posting notable gains. Germany’s DAX index has risen by 1.8%, France’s CAC 40 is up by 1.3%, and the UK’s FTSE 100 has gained 1%, all signaling broad-based optimism across global financial markets.

This temporary agreement marks only an initial step toward securing a lasting deal, and the outcome of future negotiations is still uncertain. According to analysts cited by the Washington Post, “While the agreement helps ease tensions in the trade war, it does little to alter the broader trend of worsening relations between Beijing and Washington.”