All three major U.S. indices responded, with short-term bullish traders pleased at the news. Consequently, Dow Jones Industrial Average futures jumped by 408 points, corresponding to a 1% gain. The jump follows a weekend meeting between Chinese officials and US representatives. By all appearances, they made great strides and reached significant consensus during their conversations. Vice Premier of the People’s Republic of China, He Lifeng, emphasized the positive outcomes of the discussions, stating that the meeting “achieved substantial progress and reached important consensus.”
In the joint statement, the two nations agreed to create a bilateral consultation mechanism to address various persistent trade and economic concerns. This new framework aims to facilitate ongoing dialogue and minimize future conflicts. Dan Ives, global head of technology research at Wedbush Securities, referred to the weekend’s deal as a “best case scenario.” He hopes that this would open doors for a larger bilateral U.S.-China trade deal. He described the situation as “a huge positive in the right direction for the markets.”
Though this may be a positive sign, tensions are still extremely high between the two countries. Last month, President Donald Trump announced tariffs on imported goods from China, up to 145%. In response, Beijing matched the U.S. tariffs dollar-for-dollar, increasing duties on targeted U.S. goods to as high as 125%. These highly dynamic tariffs have introduced a novel element of uncertainty into the global marketplace, forcing investors to watch developments like hawks.
Market participants are anxious for further clarity. Then on Monday morning, Bessent will be giving a briefing with more details on the discussions, so don’t miss it! Other important economic indicators will be released this week. On Tuesday, we’ll get the CPI reading for April, followed by retail sales on Wednesday and the PPI on Thursday. Investors are particularly looking to see how the current trade spat is starting to take a toll on the wider economic landscape.
Earlier this week’s surge in futures marks a big turnaround. As recently as last week, when all three major averages experienced their first losing week in three weeks. Though analysts are still sorting through the implications of these trade negotiations on overall market performance in the months ahead,