Nvidia jumps more than 5% on chip deal with Saudi Arabia as S&P 500 erases 2025 losses

• The S&P 500 rose again Tuesday thanks to the 90-day pause on tariffs on Chinese goods and Nvidia's announcement of a partnership with Saudi Arabian AI startup Humain. The benchmark index has now erased its losses for the year.

The S&P 500 rose around 0.72% Tuesday, erasing losses for the year after Monday's news that the Trump administration reached a 90-day agreement with China to slash reciprocal tariffs.

The Nasdaq Composite also closed around 1.6% higher, while the Dow Jones Industrial Average lost 0.64%.

Leaders for the day include tech companies, in particular chip maker Nvidia, up more than 5%, and Meta Platforms, jumping 2.6%. After UnitedHealth said that it was suspending 2025 guidance as CEO Andrew Witty steps down due to personal reasons, the company's stock fell over 17% Tuesday.

It’s a sharp reversal from the past few months, when the S&P 500 was down as much as 17% as investors fretted over the effects of President Donald Trump’s tariff policies. But news of the recent détente with China has eased some worries. It's the second day in a row stocks have rebounded, after the Dow gained more than 1,000 points Monday. The S&P now stands at its highest level since mid-March.

"There are still a lot of unknowns over where tariff rates will ultimately land," says Adam Turnquist, chief technical strategist for LPL Financial. "However, for now, investors have embraced the de-escalatory backdrop, especially the tariff reprieve deal reached with China over the weekend."

A chip deal with Saudi Arabia announced Monday also contributed to the rally, as was a lower-than-anticipated inflation report released Tuesday. Nvidia announced Tuesday it will partner with AI startup Humain, which is owned by Saudi Arabia's sovereign wealth fund, and will send 18,000 chips to the country.

In other markets news, S&P Dow Jones Indices announced that Coinbase, the crypto exchange operator, will be added to the S&P 500 stock index next week, in place of Discover Financial Services. Meanwhile, Microsoft announced it was cutting 3% of its workforce.

In a note Tuesday, JPMorgan said that the temporary deal with China is also reducing the odds of a recession significantly this year.

"Historically, investors have been rewarded for staying the course during periods of heightened uncertainty," writes Jeff Schulze, head of economic and market strategy at ClearBridge Investments. "We believe the direction of travel for U.S. equities over the coming year is higher as greater clarity on both the trade policy and fiscal front continues to emerge."

This story was originally featured on Fortune.com