US stocks get boosted by potential of easing US-China trade tension
(MENAFN) US stock markets closed at record levels on Monday, driven by optimism over a potential easing of trade tensions between Washington and Beijing ahead of US President Donald Trump’s scheduled meeting with Chinese President Xi Jinping, as well as rising expectations for an upcoming Federal Reserve rate cut.
The Dow Jones Industrial Average rose 0.71%, or 337.47 points, finishing at a record 47,544.59. The Nasdaq surged 1.86%, or 432.59 points, to close at 23,637.46, while the S&P 500 gained 1.23%, or 83.47 points, ending above the 6,800 mark for the first time at 6,875.16.
Markets responded positively after signs over the weekend indicated potential progress in US-China trade talks. Speaking from Air Force One, Trump said, “I have a lot of respect for President Xi, and we are going to come away with the deal." Treasury Secretary Scott Bessent, at the ASEAN Summit in Kuala Lumpur, added, “I think we have a very successful framework for the leaders to discuss on Thursday.”
The proposed framework may include resuming Chinese purchases of US soybeans, halting the planned 100% tariffs on China due November 1, and delaying China’s rare earth export restrictions, which triggered the latest trade dispute. Other elements could involve resolving the TikTok conflict and establishing a contract for the US version of the app.
In addition to trade optimism, expectations of a Fed rate cut on Wednesday, fueled by weaker-than-expected inflation data, helped lift the markets. Chipmakers, a sector highly sensitive to US-China tensions, saw notable gains. Broadcom and Nvidia rose over 2%, while Qualcomm shares jumped 11% following the release of new AI chips, positioning it against Nvidia and AMD.
AMD shares climbed nearly 3% after partnering with the US Department of Energy on two next-generation supercomputers in a $1 billion initiative.
Conversely, rare earth stocks fell amid speculation that China might delay export controls. Energy Fuels dropped 10.6%, USA Rare Earth fell more than 8.3%, and MP Materials declined 7.4%.
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