The United States and China reached a better-than-expected dealto temporarily slash tariffs, sending stocks and the U.S. dollar sharply higher, as the world's two biggest economies seek to end a damaging trade war that has stoked fears of recession.

After a massive rally off the April bottom, some on Wall Street are warning the market is now pricing in a lot of good news ahead.

Strategists warned the move, announced after the market close on Friday, could spark some near-term selling in stocks and Treasurys.

* Yields of government bonds with the longest maturities have risen sharply - not just in the United States, where the chaotic first months of Trump's second term in the White House are causing investors to demand better returns on their bond holdings, but also in Japan and Britain.

The decidedly unsexy bond market is usually pretty quiet. But when they want to, bond investors can send a loud, clear message to Washington. They did just that Wednesday and Thursday.

Cathie Wood says Trump’s tariffs could ease trade rules and boost tech and healthcare growth, with AI innovation helping offset the US deficit.

Stocks and the dollar surged on Monday after the United States and China said they had agreed on a 90-day pause on tariffs and reciprocal duties would drop sharply, giving investors some confidence that a full-scale trade war may have been averted.

The centerpiece of the U.S. bond market is the 10-year Treasury, and its yield has climbed to 4.54% from 4.43% at the end of last week and just 4.01% early last month. That's a notable move for the bond market, which measures things in hundredths of percentage points.

Normally, when a credit is downgraded, yields rise at the margin and prices drop (relative to other bonds). In August 2011 the reaction was counterintuitive. Click to read.

U.S. President Donald Trump has imposed a blanket 10% tariff on all imports, and hit China with a higher tariff of 30%. More worrying for sportswear brands, the key footwear and clothing manufacturing hub of Vietnam faces the threat of a steep 46% tariff returning in July.