Cash may be king, but every so often it has to get off the throne.

When you put your cash to work, you're using your money to generate income over time.

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Chris Versace is making such a move as the stock market surged on May 12, fueled by an at least temporary deescalation in the U.S.-China tariff war.

"That is leading us to put some cash to work," the lead portfolio manager for TheStreet Pro Portfolio said.

After two days of negotiations in Switzerland, the U.S. and China agreed to temporarily slash their steep tariffs on each other.

Analyst: U.S.-China trade deal is a 'tactical retreat'

The U.S. will cut extra tariffs it imposed on Chinese imports last month to 30% from 145% for the next 90 days, while Chinese duties on U.S. imports will fall to 10% from 125%.

The pause does leave tariffs higher than before President Donald Trump started ramping them up last month.

The news sent global stocks and the U.S. dollar surging as the world's top two economies tapped the brakes on the trade war, which had fed fears of a global recession. Stocks were trading mixed at last check .

The two sides are expected to meet again in the next few weeks to negotiate a “more fulsome agreement,” Treasury Secretary Scott Bessent said on CNBC’s “ Squawk Box .”

“While positive for risk assets insofar as it reduces the probability and intensity of a prospective global slowdown, the US-China 'deal' is probably a 'mutually agreed-to tactical retreat,' despite the expressions of goodwill expressed by both sides,” said Thierry Wizman, global foreign-exchange and rates strategist at Macquarie.

Related: Consumer-price inflation slows in April, but tariff impact on prices will linger

"Avoiding a severe slowdown was a goal of both sides, but the US has not abandoned its desire or intent to slow or stop China's rise to primacy in global economic, political and military matters," he added.

In addition, Goldman Sachs adjusted down its forecast for the likelihood of a recession in the U.S. to 35% from 45%.

The investment firm highlighted that the U.S.-China agreement helped ease trade tensions between the world's two largest economies, contributing to greater optimism about a global economic recovery.

Goldman analysts called for the S&P 500 Index to reach 6,500 in the next 12 months, up from 6,200 previously. The firm had cut its S&P 500 forecasts twice in March, citing higher recession risk and tariff-related uncertainty.

Separately, U.S. consumer price inflation eased again last month, suggesting little impact from Trump's tariff regime heading into the second quarter.

Fund manager Versace warns of fits and starts

Versace said the developments reduced tariff-related headwinds and dialed back uncertainty in the market, "but we also suspect it is leading to short-covering for certain parts of the market, such as retailers, that would have felt the worst of the tariff brunt." (Short covering is traders' closing of bets that stock prices would drop.)

Tariffs have rocked the retail sector, by increasing costs for producers and consumers and creating uncertainty for investors.

Okay, so here's Versace's plan for the portfolio:

"While we make these moves, we recognize there could be some fits and starts in the market along the way as the U.S. and China negotiate further, and we can’t rule out bombastic comments from President Trump," Versace said.

Related: Wedbush warns of AI-driven hacking, lists top cybersecurity stocks

He said he would continue to focus on the data, "recognizing the market is likely to give this week’s April inflation and retail sales data a pass following trade developments."

"We also suspect these trade developments should help pave the way for other trade deals in the coming days," Versace added.

"That combination is likely to help lift [earnings-per-share] expectations for second-half 2025 and 2026, adding to the market’s move higher," he said. "For those reasons, we are putting capital to work, and are also resuming our hunt for new contenders."

Related: Veteran fund manager unveils eye-popping S&P 500 forecast