Talks between the US and China over the weekend have resulted in a "total reset" of trade terms between the nations, according to president Donald Trump.
Representatives from both countries met in Switzerland at the weekend in a major step towards de-escalating the trade war which has caused chaos in markets across the world.
The talks resulted in substantial cuts to the tit-for-tat tariffs which have been building since the beginning of the year, the BBC reports.
The US has agreed to slash those levies from 145% to 30%, while China will reflect that by dropping its tariffs on US imports from 125% to just 10%.
Trump cautioned that some of the tariffs had only been suspended and could be reimposed in three months, but said this was not likely to be reach the levels it had done.
The de-escalation was welcomed by investors with the S&P 500 index jumping over 3.2% in the wake of the announcement, the Dow shooting up 2.8% and the Nasdaq rocketing by 4.3% by the end of the day.
The climbs left indexes approximately where they started the year before the trade war sent markets spiralling.
FTSE 100
The UK's flagship share index, the FTSE 100, was down four points at 8,591 shortly after opening this morning.
Brent crude oil futures were up 0.12% at $65.04 a barrel.
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