New York — Global stock markets climbed on Monday while the US dollar softened amid the start of crucial trade talks between the United States and China in London. The discussions aim to ease escalating tensions between the world’s two largest economies, which have extended beyond tariffs to include restrictions on rare earth elements—critical components in technology supply chains.
President Donald Trump expressed optimism about the talks, stating his administration was receiving positive reports as officials met with their Chinese counterparts.
“Markets view any engagement with Beijing as a sign of progress, even if concrete outcomes remain uncertain,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. “For now, investors are relying on the administration’s assurances until proven otherwise.”
On Wall Street, the S&P 500 and Nasdaq closed higher, while the Dow Jones Industrial Average finished flat. The Dow was held back by losses in shares of Travelers and McDonald’s—the latter downgraded by Morgan Stanley to an “equal-weight” rating.
Dow Jones Industrial Average: 42,761.76 (down 1.11 points, flat)
S&P 500: 6,005.88 (up 5.52 points, +0.09%)
Nasdaq Composite: 19,591.24 (up 61.28 points, +0.31%)
Small-cap stocks outperformed, with the S&P 600 index rising 0.9%.
Global equities followed suit, with MSCI’s all-country world index gaining 0.22% to 893.90, poised for a second consecutive session of gains. The index has advanced in five of the last six sessions. Conversely, Europe’s pan-European STOXX 600 slipped 0.07%, snapping a four-day winning streak.
The US dollar weakened against most major currencies, as cautious optimism from a stronger-than-expected US employment report last Friday was tempered by uncertainties surrounding the trade negotiations.
Representing the US in London are Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer, according to President Trump’s social media update. China’s Vice Premier He Lifeng is leading the Chinese delegation.
In economic news, US wholesale inventories rose in April, driven by stockpiling of prescription drugs ahead of potential tariffs. Investors now await the upcoming US inflation report, due Wednesday, which could influence expectations about Federal Reserve interest rate cuts.
Morgan Stanley analysts noted May as the starting point of stronger core inflation readings, projecting tariff-driven price pressures to peak in the third quarter before easing in the fourth. Market pricing suggests a 62% probability of a Fed rate cut of at least 25 basis points by September, with officials currently observing a quiet period ahead of the June 18 policy announcement.
Long-term US Treasury yields eased early in the week, reversing gains from Friday’s robust jobs data. The benchmark 10-year note yield fell 2.8 basis points to 4.482%. Investors will closely watch upcoming auctions of three-, 10-, and 30-year Treasuries for signs of demand.
Energy markets responded positively, with US crude oil settling up 1.1% at $65.29 per barrel and Brent crude rising 0.86% to $67.04, buoyed by hopes that a trade agreement could improve the global economic outlook and weaken the dollar.
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