Both sides declined to elaborate on negotiations, saying that further details will be released on Monday.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer on Sunday said a deal had been reached with China to cut the US trade deficit.
Chinese Vice Premier He Lifeng, who met his US counterparts in Geneva, described the meeting as "candid" and an important first step.
"This is a step in the right direction, showing that both sides are interested in coming to a constructive conclusion and (developing) a better trade relationship," said Eric Kuby, the chief investment officer at North Star Investment Management Corp. in Chicago.
"The details are quite sketchy, but I think the direction sounds to be more cooperative rather than combative, and I think that we have to view that as a positive."
The meeting in Switzerland could mark one of the biggest developments since US President Donald Trump launched sweeping tariffs on April 2, which threw the global trade landscape into chaos and set off extreme market volatility.
"I'm happy to report that we've made substantial progress between the United States and China in the very important trade talks," Bessent told reporters earlier.
Trump said late on Saturday after the first day of talks that the two countries had negotiated "a total reset ... in a friendly, but constructive, manner".
He added that: "great progress" was made, without elaborating.
Recently, investors have expressed optimism that the worst-case trade scenarios would not come to pass and pointed to signs of de-escalation between the US and China as a reason behind a rebound in equities.
"Markets may be encouraged by some agreement on a deal, but it will remain contingent on further details being released," said Gennadiy Goldberg, head of US rates strategy at TD Securities in New York.
"Recent price action suggests some optimism around a trade deal. If that turns out to be the case, pricing will have been justified. The risk is if the deal is less substantial than expected. Then the market might come away disappointed."
Indeed, despite comments by Trump ahead of the talks suggesting a lower level of Chinese tariffs, and a trade deal announced on Thursday between the US and Britain, many market participants said they were not expecting major breakthroughs in the talks.
"We're still doubtful that direct US-China negotiations will lead to a 'grand compromise'," said Thierry Wizman, global FX and rates strategist at Macquarie, in a note to clients.
Trade tensions between the two nations escalated last month, when the US boosted tariffs on all Chinese imports to a whopping 145 per cent, and China then raised levies on US imports to 125 per cent.
On Friday, comments by Trump that an 80 per cent tariff on Chinese goods "seems right," making his first suggestion of a specific alternative to the 145 per cent levies, created some hope of progress toward resolving the dispute.
