Wall Street Hits Record Highs Amid Renewed US-China Trade Optimism

Sentiment took a positive turn as US and Chinese trade officials worked through the weekend in Malaysia on what many called a “positive framework” ahead of Thursday’s Trump–Xi summit. On the trade front, the early market optimism is progress in several areas, with China reportedly delaying its planned export restrictions on rare earths and agreeing to resume US soybean imports while finalizing the long-awaited TikTok deal. There is also talk of Washington easing some of the tariffs on fentanyl precursors if Beijing is cooperative but that 100% tariffs would still be on track to take effect November 1 unless an extension is granted. As the trade truce currently in place is set to expire November 10, we should also keep in mind the White House initiated Section 301 investigation shows trade tensions are not over yet.

Wedbush characterised this weekend’s news as “a very bullish sign for markets, especially tech stock market rally,” going into the highly-anticipated Trump–Xi talks in South Korea this week. If the pair can achieve a significant US-China trade deal, Wedbush also thinks it could “reshape the AI Revolution narrative,” potentially driving down investor uncertainty and taking away the major downside trade risk.

In addition to trade, this week’s outlook is also being driven by policy and earnings. The Federal Reserve is due to release its latest policy statement on Wednesday, and markets are pricing in a widely expected quarter-point rate cut. As for economic growth, five of the “Magnificent Seven” tech companies are reporting this week, which should give us a good sense as to whether AI-driven profits can continue to wow investors.

Nvidia’s GTC Washington conference also starts today, which will show how product innovation has turned into national-level AI factories and infrastructure. Jensen Huang will be speaking Tuesday at noon. We expect Dow Jones record, energy-intensive data centers, and policy collaboration will continue to be top of mind for Huang, with remarks likely underscoring the long-term size of the opportunity. “AI is the most transformative technology in human history — and the race is on,” Huang said in a preview statement.