Goldman Sachs has lowered the chance of a U.S. recession after the U.S. and China agreed to drastically roll back tariffs.

Goldman Sachs told clients Monday that it estimates there is a 35% chance of a recession in the next 12 months.

The markets reacted Monday. The Dow was up 1,000 points.

The Wall Street bank previously had the odds of a recession at 45%.

Goldman Sachs also increased its yearly GDP forecast to 1%.

It previously had annual growth forecast at half a percent.

The bank is also projecting that unemployment will rise to 4.5% in December.

That is down slightly from its previous projection of 4.7%.

Goldman Sachs also said it expects the federal reserve will start cutting interest rates starting in December.

It previously expected rate cuts in July.