Morning Bid: Re-set, surge and hold

By Mike Dolan

LONDON (Reuters) - What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets

With the dramatic re-set of U.S.-China tariffs on Monday, the market completed the hair-raising round-trip it has been on over the past six weeks of trade angst. Punch-drunk investors are now assessing whether anything in the real economy broke in the process.

In today's column, I explore whether the sudden easing of China tariffs may actually be related to an economic theory that has long been prized by American conservatives: the Laffer Curve.

Now onto all of today's market news.

Today's Market Minute

* A White House executive order said on Monday that the U.S. would cut the "de minimis" tariff on China shipments to 54% from 120%, with a flat fee of $100 to remain starting from May 14.

* U.S. President Donald Trump arrived in Saudi Arabia on Tuesday to start a four-day swing through the Gulf region, focusing more on economic deals than security crises ranging from war in Gaza to the threat of escalation over Iran's nuclear program.

* Apple’s success rests on the iPhone, which helped turn the company from a niche player in the personal computer industry into one of the world’s largest companies. Much of that was due to its supply chain in China. Now geopolitical tensions and trade wars are calling that dependence into question.

* The move by the United States and China to reduce import tariffs on each other and negotiate has been broadly welcomed by markets, but the de-escalation will do very little to restore the trade in energy commodities. Check out why in the latest piece from Reuters' columnist Clyde Russell.

* A split is emerging between the Federal Reserve and other major central banks as they try to assess the economic impact of the rapidly shifting trade war. The Fed's cautious stance runs the risk of leaving Chair Jerome Powell and his team behind the curve once again. Read the latest from Reuters' columnist Jamie McGeever.

Re-set, surge and hold

The S&P 500, Nasdaq and Dow Jones indexes all boasted gains of 3-5% on Monday, their biggest single-day percentage gains since April 9. The S&P is now back within 1% of where it started the year, breaking above its 200-day moving average for the first time since late March.

Stock futures dialed back a touch on Tuesday, but retained most of their recent gains.

Following the positive China trade news, the dollar hit its highest point in a month before falling back a bit today. China's offshore yuan outpaced it to briefly notch its best levels since November's U.S. election.