Analysts and strategists said on Monday that the new U.S.-China arrangement could reignite sentiment of risk and benefit stocks and U.S. assets.

Tai Hui, chief market strategist at JPMorgan Asset Management in Asia Pacific, said the deal opened in Geneva was better than expected, but uncertainty remained.

“The reduction in tariffs is larger than expected,” he said, although he noted that it will be difficult for Beijing and Washington to reach more specific trade arrangements in just three months.

"The 90-day period may not be enough to get the parties to reach a detailed agreement, but it puts pressure on the negotiation process," Hui said. "For example, we are still waiting for more details about the other terms of this agreement, such as whether China will relax under the restrictions on rare earth exports."

However, Hui acknowledges the market's positive response to news.

“Overall, we expect the market to resume risks in the short term,” he said. “The pressure on (the Federal Reserve) to lower interest rates may also be temporarily alleviated.”

Jordan RochesteR monetary strategy director EMEA and executive director of London Mizuho Bank touted the deal as "much better than expected" in a note on Monday morning. He believes that developments will mean “'selling American narrative (squeezed).

U.S. assets, including DollarThe Treasury Department and stocks have had a lot of volatility in the weeks since Trump revealed the full scope of his tariff plan.

On Monday morning, USD IndexMeasuring the value of green to a basket of major currencies increased by 1%. Benchmark output 10 years of US fiscal notes As the price drops by 6 basis points.

Rochester said the 90-day deal would drive the U.S. tariff rate (which Chinese companies actually ended up paying) from 108.8% to 27%, which he noted far beyond the market consensus to reduce to 50% to 60%.

"It is also worth noting how (officials) downplayed the requirement to continue the 90-day negotiations at the press conference, as long as the negotiations are constructive," he said. "What this means for international trade is that the de facto "tariff wall" is being lowered to something more viable and raises market pricing in other countries to get similar treatment when negotiating with the United States."

According to Wall Street strategists, the outcome of trade negotiations is much better than expected, meaning stocks can gather further.

“Despite the stock rebound, there is still a lot of dispersion (between exporters under the hood), the dollar risk premium remains high, and the overall position is light/defensive,” Emmanuel Cau, head of European equity strategy at Barclays, said in an emailed statement. “Pain trading to the rise means there is room for inventory to be more than impulsive.”

Meanwhile, Deutsche Bank strategists said morning news had greatly boosted their emotions. Now, they expect U.S. stocks to outperform their European competitors in the near term.

"Today's announcement even exceeded our constructive expectations," they said. "We think this announcement is not only better than we expected, but better than the market responded to in March.

“While it’s hard to say how it will develop in the after 90 days, the impact on the market is clearly supported…staying bullish and considering stepping back to the sector of Chinese tariffs (formerly automobiles, healthcare and chips).

Mikkel Emil Jensen, senior analyst at Sydbank, said the 90-day tariff pause marked a major downgrade in the U.S.-China trade war.

"(At least so far, it has eliminated a lot of uncertainty related to world trade," Sydbank senior analyst Mikkel Emil Jensen told CNBC after the announcement.

"The deal may be temporary, but the deal is better than expected and may have a positive ripple effect on global trade and increase demand for container freight," said Sydbank analysts. Mask Monday morning was 12% higher.

"More importantly, temporary transactions may improve pre-loading effects, triggering companies to increase inventory before the trade war worsens," Jansen added.

Dan Ives of Wedbush said he believed the U.S.-China deal “apparently just the beginning of a broader, more comprehensive negotiation,” describing the news as “a huge victory for the market and the bulls.”

“As the deal negotiations progress, we expect these two tariff numbers to drop significantly in the coming months,” he said in a note. “The baseline view entering the weekend is some downgrades to the U.S./China tariffs and more negotiated agreements…but in this morning’s dream (officials) made massive cuts in these negotiations and toward reciprocal tariffs.”

Ives, known for its bullish outlook for technology, believes the deal means new highs for markets and tech stocks “now the dining table for 2025.”

Since the tariffs were announced in early April, tariffs are expected to be quickly restored between the world's two largest economies, reversing the decline in cargo ships and transport containers.

Lindsay James, investment strategist at Quilter, said the new deal “is not as good as the 20% level that existed before the so-called Liberation Day, but added that the interim agreement would make “a considerable portion of the trade resume, which, despite the slightly higher prices, is slightly higher.”

- Sam Meredith of CNBC contributed to the report.