U.S. and China Trade Talks Spark Mixed Market Reactions
U.S. stocks remained relatively steady on Tuesday as the U.S. and china entered a second day of trade negotiations in London. The Dow Jones Industrial Average climbed 0.25%, while the S&P 500 increased by 0.55%. The NasdaqComposite showed the strongest performance with a 0.63% gain.
During the talks, Commerce Secretary Howard Lutnick reported that discussions were progressing well. However, key issues like export controls are still on the table. U.S. officials want China to release rare earth materials, whereas China seeks better access to American semiconductors.
Despite the positive tone from officials, Wall street remained cautious. Investors are keeping a close eye on the talks for any potential breakthroughs. Simultaneously occurring, Chinese markets faced volatility, with early Tuesday’s dip showcasing investor concerns.
President Trump’s cautionary note that “China’s not easy” also influenced market expectations.
A survey by the National Federation of Independent Business revealed a modest rise in U.S. small-business sentiment in May. This was the first positive shift as september, likely due to easing tariff worries and the anticipation of Trump’s tax-and-spending bill. Though, some business owners still have reservations about the future.
The World Bank, however, lowered its U.S. growth forecast to 1.4% for 2025, citing continued trade uncertainty.
Blackstone has big plans in Europe, aiming to invest up to $500 billion over the next decade, citing expected growth in the region.
Investors are also waiting for Wednesday’s May Consumer Price Index report, which may change inflation and Fed policy expectations. Analysts predict a rise in price pressures.
