A temporary truce

Call it a sigh-of-relief rally.

• Investors cheered the U.S.-China trade deal today, sending stocks soaring after the world's two largest economies agreed to slash tariffs for 90 days as they continue talks.

State of play: The S&P 500 — which jumped 3.3% today — has now gained nearly 21% from its low point in April, when it dipped into correction territory at the nadir of the market's fear of the impacts of a trade war.

• The Dow today soared 1,160 points, or 2.8%, while the tech-heavy Nasdaq surged 4.35%.
• The VIX index — a gauge of market volatility — dropped below 20 for the first time since March 27.
• And Treasury yields rose as investors felt less need to play it safe.

What they're saying: "Peak pessimism is firmly in the rear-view mirror," says Seema Shah, chief global strategist at Principal Asset Management.

Yes, but: The U.S.-China deal isn't permanent, the Trump administration continues to saber-rattle about trade with other nations, and tariffs remain elevated compared to historic levels.

• "We believe one way to describe the current moment is that financial markets and the economy have entered the eye of the storm," Wells Fargo head of global investment strategy Paul Christopher wrote today, noting that the effects of the trade war haven't fully reverberated throughout the world.

The bottom line: The worst might be over. Emphasis on might.