Stocks Climb as US-China Trade Talks Progress
Investor Optimism Buoys Market Amid Tariff Negotiations
Equities edged upward Tuesday, driven by renewed confidence as trade discussions between the United States and China continue in London. The positive momentum follows a temporary easing of tariffs last month, sparking hopes for a more comprehensive agreement.
Trade Discussions Show Promise
The Dow Jones Industrial Average gained 110 points, representing a 0.2% increase. The S&P 500 rose approximately 0.4%, and the Nasdaq Composite saw a gain of nearly 0.3%. Howard Lutnick, U.S. Commerce Secretary, stated that the talks are “going well, and we’re spending lots of time together,”
and anticipates the discussions will extend throughout the day.
Both nations previously agreed to reduce tariffs for a 90-day period, a significant step forward after Donald Trump’s proposal for substantial levies on imports.
Market Strength and AI Fuel Gains
Stock performance in June has been robust, fueled by optimism surrounding trade negotiations and the overall health of the market. Corporate earnings have been strong, and a resurgence in technology stocks, spurred by recent artificial intelligence announcements, has contributed to the gains. According to Statista, global spending on AI is projected to reach $503.8 billion in 2025, a 26.9% increase from the previous year. Statista
“Technically, shares have been on a nice run eclipsing key levels to get back on track. Longer-term they started the week right above its downtrend line going back to its annual highs.”
—Jay Woods, Chief Global Strategist of Freedom Capital Markets
Woods also noted that “The rally looks like many other technology names that are trying to get back to old highs. The good news is that given the change in trajectory, even weakness looks to have a soft-landing spot and good entry point from a risk/reward perspective.”
Inflation Concerns Remain
Despite the positive outlook, some investors are wary that existing tariffs could contribute to increased inflation. Mark Malek, chief investment officer of Siebert Financial, cautioned that “Today, while the picture is not completely clear, enforceable tariffs exist.”
He added, “The Fed is concerned that the real inflationary effects have not yet shown up yet. Based on the complex collection of tariffs in effect today, we would expect aggregates such as autos, apparel, and foods to show initial signs of tariff-driven inflation.”
The market will continue to closely monitor the progress of trade talks and assess the potential impact of tariffs on future economic conditions.