A regional stock gauge rose 0.2% as talks between the US and Chinese officials were set to resume Tuesday. The dollar weakened against most of its Group-of-10 peers. Treasuries steadied after yields on the 10-year US bonds fell in the last session to 4.47% as inflation expectations eased. The Nasdaq Golden Dragon China Index rose 2.1% in New York trading.
While no significant breakthroughs were announced after the first day of talks and stocks pared some of their earlier gains, US officials sounded optimistic about the negotiations. With a key inflation read on tap Wednesday – and the Federal Reserve is entering a blackout period before its June 18 interest-rate decision – money managers are wrestling with what could propel the S&P 500 back to a record after the index soared 20% from its April lows.
“Markets have moved higher on tariff postponement and the perception that they will be more moderate than initially announced,” said Richard Saperstein at Treasury Partners. “We expect markets to remain headline-sensitive, as trade deals take time to negotiate and unsettling tariff news is likely to cause noticeable volatility.”
The S&P 500 eked out a small gain, remaining nearly 2% away from its February peak. Tesla Inc. jumped about 4.5% as President Donald Trump reiterated the desire to end his spat with Elon Musk. Apple Inc. slipped over 1% as it didn’t feature any noticeable artificial-intelligence advancements during a developers conference.
Meanwhile, a gauge of the dollar edged lower for a second session on Tuesday, with broad greenback weakness shifting attention to several other assets. Platinum extended its surge as the market for the precious metal strains under signs of severe tightness. Last week, silver jumped to a 13-year high, while platinum and palladium were aided by technical momentum as well as improving fundamentals. Bitcoin rose for a fifth consecutive day.
US Commerce Secretary Howard Lutnick said discussions between Washington and Beijing were “fruitful” and Treasury Secretary Scott Bessent cited a “good meeting.”
“We are doing well with China. China’s not easy,” Trump told reporters at the White House on Monday. “I’m only getting good reports.”
Talks will continue into a second day, according to a US official, as the two sides look to ease tensions over shipments of technology and rare earth elements. The advisers will meet again Tuesday at 10 a.m. in London, the official said.
The trade discussion between China and the US in London offers another key opportunity for both sides to resolve differences through equal dialogue and negotiation, according to a commentary in the People’s Daily, the flagship newspaper of the Communist Party.
Tangible evidence that the tariffs are impacting trade between the two biggest economies came on Monday with data showing Chinese shipments to the US last month had the worst drop in more than five years.
Asian stock markets were, however, more enthusiastic Monday. A gauge of Chinese shares in Hong Kong entered a bull market – trader parlance for a rise of 20% from a recent low
Still, Wall Street strategists are growing optimistic about US stocks, with forecasters at Morgan Stanley and Goldman Sachs Group Inc. suggesting resilient economic growth would limit any pullback over the summer.
Morgan Stanley’s Michael Wilson said a sharp improvement in Corporate America’s earnings outlook bodes well for the S&P 500 into the year end. He reiterated his 12-month price target of 6,500 points. The gauge closed at 6,005.88 Monday.
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