Stocks are surging on Wall Street after China and the United States announced a 90-day truce in their trade war.

They agreed to take down most of their tariffs that economists warned could start a recession and create shortages on U.S. store shelves.

The S&P 500 was 2.7% higher in early trading Monday. The Dow Jones Industrial Average jumped 981 points, or 2.4%, and the Nasdaq composite was 3.7% higher.

Crude oil prices jumped because a global economy less weakened by tariffs would be hungrier for fuel. The value of the dollar climbed against other currencies and Treasury yields rose.

American microchip companies, which source much of the material needed for their semiconductors from China, were among the biggest gainers early Monday. ON Semiconductor, Micron and Broadcom all soared between 6% and 8%. Nvidia rose 4.8%.

Travel companies also enjoyed big gains, with American, Delta and United Airlines all up around 7%. Major cruise lines rose similarly.

Retailers, who get much of their inventory from China, also benefited from the announced tariff pause. Amazon was up 7.8% and Best Buy jumped 10.4% early.

Pharmaceutical companies were among the few losers Monday after Trump said he planned to sign an executive order that, if implemented, could bring down the costs of some medications.

The order Trump is promising will direct the Department of Health and Human Services to tie what Medicare pays for medications administered in a doctor's office to the lowest price paid by other countries.

A big pharma trade group criticized the plan and Johnson & Johnson, Merck and Pfizer all tumbled around 3%.

Also Monday, Texas power company NRG Energy said it will essentially double its generation capacity through a $12 billion cash and stock acquisition of natural gas facilities in the Northeast and Texas from LS Power Equity Advisors, an energy-focused investment manager. Shares of NRG rose more than 9% early Monday.

The full impact on the complicated tariffs and other trade penalties enacted by Washington and Beijing remains unclear. And much depends on whether they will find ways to bridge long-standing differences during the 90-day suspension.

But as trade envoys from the world's two biggest economies blinked, finding ways to pull back from potentially massive disruptions to world trade and their own markets, investors rejoiced.

Oil prices also rallied, with U.S. benchmark crude oil gaining $2.48, more than 4%, to $63.50 per barrel. Brent crude, the international standard, added $2.39 to $66.30 per barrel.

The U.S. dollar surged against the Japanese yen, trading at 148.06 Japanese yen, up from 146.17 yen. The euro fell to $1.1103 from $1.1209.

In other stock trading, Tokyo's market closed before the joint statement was issued, gaining less than 0.1% to 37,644.26. But Hong Kong's, which closes later, jumped 3% to 23,558.11.

In Europe at midday, Germany's DAX gained 0.3% and the CAC 40 in Paris added 1.3%. Britain's FTSE 100 was 0.5% higher.

Investors were also watching for developments in other flashpoints, including clashes between India and Pakistan, the war in Ukraine and conflict in the Middle East.

The Sensex in Mumbai shot up 3.2% after India and Pakistan agreed to a truce after talks to defuse their most serious military confrontation in decades. The two armies have exchanged gunfire, artillery strikes, missiles and drones that killed dozens of people.

Pakistan's KSE 100 surged more than 9% and trading was halted for one hour following a spike driven by the ceasefire and an International Monetary Fund decision Friday to disburse about $1 billion of a bailout package for its battered economy.

The Shanghai Composite Index picked up 0.8% to 3,369.24.

Chinese EV battery maker CATL, or Contemporary Amperex Technology Co., Ltd., said in a prospectus filed with the Hong Kong Stock Exchange that it plans to raise nearly $4 billion in a share listing.

Elsewhere in Asia, the Kospi in Seoul gained 1.2% to 2,607.33.

Australia's S&P/ASX 200 climbed less than 0.1% to 8,233.50.

Taiwan's Taiex gained 1%.