U.S. Stocks Close Monday Higher on Trade Optimism
(MENAFN) US equities surged on Monday, fueled by optimism over easing US-China trade tensions ahead of US President Donald Trump’s scheduled meeting with Chinese President Xi Jinping, alongside growing expectations of a Federal Reserve rate cut.
The Dow Jones Industrial Average climbed 0.71%, adding 337.47 points to close at a record 47,544.59. The Nasdaq jumped 1.86%, or 432.59 points, finishing at an all-time high of 23,637.46. The S&P 500 advanced 1.23%, rising 83.47 points to 6,875.16, marking its first close above 6,800.
Markets were lifted as signs emerged over the weekend of potential progress in US-China trade negotiations, ahead of Trump’s high-stakes meeting with Xi.
About the upcoming talks, Trump said from Air Force One on Monday: “I have a lot of respect for President Xi, and we are going to come away with the deal."
Treasury Secretary Scott Bessent, speaking from the ASEAN Summit in Kuala Lumpur, Malaysia, added: “I think we have a very successful framework for the leaders to discuss on Thursday.”
Sources suggest the framework could include restarting Chinese purchases of US soybeans, canceling Trump’s threatened 100% tariffs on China slated for November 1, and delaying China’s export restrictions on rare earths that triggered the latest trade confrontation.
The potential agreement may also address the TikTok dispute, possibly involving a contract for the app’s US-based local version.
Alongside trade optimism, markets were buoyed by expectations of a Fed rate cut this week, prompted by lower-than-anticipated inflation data.
Semiconductor stocks, the sector most exposed to China tensions, led gains on Monday. Broadcom and Nvidia shares rose more than 2% each. Qualcomm surged 11% after unveiling new AI chips positioning it in competition with Nvidia and AMD.
AMD also climbed nearly 3% after the US Department of Energy and AMD announced plans to develop two next-generation supercomputers under a $1 billion partnership.
Conversely, rare earth stocks retreated amid speculation China might delay its export controls. Energy Fuels dropped 10.6%, USA Rare Earth fell over 8.3%, and MP Materials declined 7.4%.
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