NEW YORK (AP) — U.S. stocks set more records on Wednesday following a trade deal between the world’s No. 1 and No. 4 economies, one that would lower proposed tariffs on Japanese imports coming to the United States.

The S&P 500 added 0.8% to its all-time high. The Dow Jones Industrial Average rallied 507 points, or 1.1%, and the Nasdaq composite climbed 0.6% to hit its own record.

Stocks jumped even more in Tokyo, where the Nikkei 225 rallied 3.5% after President Donald Trump announced a trade framework that would place a 15% tax on imports coming from Japan. That’s lower than the 25% rate that Trump had earlier said would kick in on Aug. 1.

“It’s a sign of the times that markets would cheer 15% tariffs,” said Brian Jacobsen, chief economist at Annex Wealth Management. “A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.”

Trump has proposed stiff taxes on imports from around the world, which carry the double-edged risk of driving up inflation for U.S. households while slowing the economy. But many of Trump’s tariffs are currently on pause, giving time to reach deals with other countries that could lower the tax rates. Trump also announced a trade agreement with the Philippines on Tuesday.

So far, the U.S. economy has seemed to hold up OK despite the pressures on it. And tariffs already in place may be having less of an effect than expected, at least when it comes to the prices that U.S. households are paying at the moment.

“The main lesson about tariffs so far is that passthrough to consumer prices is tracking somewhat lower than in 2019,” according to Goldman Sachs economist David Mericle.