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China just announced its biggest economic stimulus since the pandemic, which is reverberating in stocks and commodities worldwide.

After the details of the monetary stimulus and support for the stock market were announced Tuesday by the People’s Bank of China (PBOC), the nation’s benchmark index, the CSI 300 (000300.SS), surged 4.3% — its largest jump since July 2020.

The country’s currency, the renminbi (CNH=X), dropped 0.6% — the most since the Japanese yen imploded in early August.

In the US, stocks rose, but the biggest effect was felt in commodities. Silver futures (SI=F) skyrocketed over 4.5% to a decade-plus high. Copper futures (HG=F) — already on a nine-day tear — notched a 10th straight win as it surged to a two-month high.

The stimulus, China’s latest attempt to pull its economy out of a slump caused by a shaky property market and deflationary pressures, includes over $325 billion in measures, mostly via monetary — as opposed to fiscal — channels.

For banks, the PBOC cut the amount of money required to set aside for loans — the reserve requirement ratio — by half a percentage point, freeing up about $142 billion in short-term liquidity.

The plan also lowers short- to medium-term interest rates and makes mortgage relief a top priority.

According to PBOC governor Pan Gongsheng, these moves will benefit around 50 million households, saving them $21.3 billion annually in interest expenses.

For China’s ailing stock market (the CSI is down 40% from its 2021 peak), a $71 billion stock market stabilization program was introduced to allow securities firms, funds, and insurers to access funding for stock purchases through a swap facility.

But before investors start celebrating, it’s helpful to know that China’s track record with these big stimulus pushes has been mixed to poor.

In 2008, the country’s massive infrastructure spending led to unsustainable debt. Fast-forward to 2015, and a stock market crash wiped out gains despite similar interventions. And during the pandemic, the Chinese property sector collapsed after another stimulus effort fueled a bubble.

The question on everyone’s mind: Will China add fiscal stimulus to that record?

If Beijing starts throwing more government money at the problem, particularly for infrastructure, that could have global ripple effects.

Commodities would likely see another big push, impacting everything from US manufacturing to energy sectors. There could be major shifts in supply chains and pricing for raw materials (yes, again).

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As Bloomberg’s chief Asia economist Chang Shu put it, “Delivering all these measures at once is highly unusual,” going on to say that it “speaks to the urgency felt in Beijing to head off deflationary risks and get growth on track for this year’s 5% [national growth] target.”

And that urgency is why many are speculating that fiscal policy could be the next lever Beijing pulls.

So, what does this all mean for US investors?

Inflated commodity costs don’t necessarily make it to the consumer level of inflation. However, pernicious swings in inflation could be on the horizon, as China’s measures could push commodity prices higher — especially if Beijing keeps pulling levers. For US businesses, this means higher input costs, unpredictable consumer demand, and planning headaches, especially for smaller firms.

In the words of Macro Compass founder Alfonso Peccatiello in a note to clients, “We are not risking a second inflation wave. We are rather looking at more inflation volatility over the next decade.”

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