So much for a U.S.-China trade war. If only President Trump had thought of that earlier!

Boeing (BA) , Deere (DE) , Caterpillar (CAT) and General Electric (GE) were among the leading gainers Monday as the Dow Jones Industrial Average rose 1.2% and the S&P 500 Index added 0.74%. NXP Semiconductors (NXPI) and Qualcomm (QCOM) helped the Nasdaq Composite rise about 0.34%, amid signs that the U.S. is abandoning threats to slap tariffs on Chinese imports worth up to $150 billion.

The good news for stock investors is that the major U.S. equity markets are about where they were at the beginning of 2018, even if the are still below the heights that were scaled at the end of January. Part of the reason may be that though the President previously said trade wars are good, and easy to win, the reality points to a contrary conclusion.

Treasury Secretary Steven Mnuchin said on Sunday, May 20, that talks had led to a "hold" on the current trade dispute between the world's largest economies, despite no specific agreement being reached over the multi-day talks in the U.S. capital.

Boeing, the biggest U.S. aerospace exporter, gained as fears receded that a trade war could jeopardize as much as $1.1 trillion in sales to China over the next 20 years. Caterpillar, which is trying to participate in China's $1 trillion infrastructure project to reanimate the old Silk Road trading route by building modern transportation networks across Africa, the Middle East, Europe and Asia, gained about 3% to its highest levels since February.

Deere gained about 2% as the easing of trade war fears boosted not only the company's prospects of exports to China but also the fortunes of American farmers, who have been bracing for Chinese tariffs on $50 billion of U.S. imports, chiefly agricultural commodities including corn, cotton, wheat and soybeans. The President also tweeted that China has agreed to buy "massive" amounts of additional farm and agriculture products.

China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products - would be one of the best things to happen to our farmers in many years!

— Donald J. Trump (@realDonaldTrump) May 21, 2018

To be sure, the U.S. reversal for now on the tariff issue, begun ostensibly for national security reasons to protect the domestic steel and aluminum industries, didn't do investors in those companies any good. US Steel (X) fell almost 4% and Steel Dynamics (STLD) lost 0.8%. The tariff war truce cuts both ways, but investors for the most part agree that a trade war with China is a negative for U.S. equity prices.

One question is how we got here in the first place.

So much of the anxiety that has pervaded the equity markets in 2018 could have been avoided if the President had simply said or done nothing about starting, or ending, or winning, or losing, global trade wars. His policies of low corporate taxes, the reversal of the federal regulatory regime and scant enforcement of existing regulations affecting Corporate America have helped produce a growing economy and usher in rising business profits for the foreseeable future, or as long as the President stays in the White House.

That's to say nothing about the ever-growing control corporations have over their labor force. The Supreme Court in a 5-4 ruling for which Justice Neil Gorsuch wrote the majority opinion, affirmed that companies don't have to submit to class action lawsuits in case of discrimination or pay disputes, as long as an employee has agreed to be bound by arbitration.

"The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written," Gorsuch wrote.

It's a victory for corporations and their shareholders, widening an environment that for equity investors is more favorable than at any time since the Roaring Twenties, or perhaps the Gilded Age.

To contact the writer: john.pickering@thestreet.com. On Twitter: @johnpickering16

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