Stock markets and the dollar rose on Tuesday as trade talks between the United States and China were set to extend for a second day, with signs that tensions between the world’s two largest economies could be easing. Talks wrapped up Monday night and were set to resume at 9:00 GMT on Tuesday.
Following the meeting, top U.S. officials signaled progress, with White House economic adviser Kevin Hassett noting that he expects the meetings to be brief but end with key deals.
As Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer were set to meet for the second day with their Chinese counterparts, investor focus has been on the progress of the talks.
Any signs of progress in negotiations will likely relieve markets, which have been impacted by Trump’s tariffs and the China-U.S. trade war.
Asian shares rise
In the Asian stock market, shares were up, extending yesterday’s gains. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.42 percent, while Nasdaq futures gained 0.31 percent. In addition, S&P 500 futures edged around 0.1 percent higher.
Japan’s Nikkei stock index rose 0.27 percent, while Hong Kong’s Hang Seng dipped 0.30 percent.
In Tokyo, attention turned to the Japanese government bond (JGB) market, following news that Japan is considering buying back some super-long government bonds issued in the past at low interest rates.
In addition, South Korea’s KOSPI Index gained 0.15 percent to 2,860.19, and the Taiwan Weighted Index was up 2.07 percent to 22,242.14. However, the Shanghai Composite Index fell 0.56 percent to 3,380.71, while the broader Topix index rose 0.030 percent.
Read: Crude oil prices climb above $67.2 as U.S.-China trade talks show promise
U.S. dollar edges up
The U.S. dollar index was up 0.18 percent to 99.12 as of 6:18 GMT. In the European stock market, the EURO STOXX 50 was down 0.16 percent, while the FTSE 100 Index edged 0.064 percent lower.
Trump’s trade policies and worries over America’s growing debt have impacted investor sentiment toward U.S. assets. This decrease in confidence has pressured the dollar, which has already fallen more than 8 percent this year.
Markets will now await the release of key U.S. inflation data on Wednesday. Analysts expect core consumer prices to have picked up slightly in May, which could push back against bets of imminent Federal Reserve rate cuts. Traders will also look forward to the producer price index (PPI) report, which will be released a day later.
Traders expect the Fed to keep rates on hold at its policy meeting next week, but have priced in around 44 bps worth of easing by December.
In the oil market, prices edged up, with Brent crude futures gaining 0.24 percent to $67.20 a barrel. U.S. West Texas Intermediate crude was up 0.25 percent to $65.45 per barrel after hitting a more than two-month high earlier in the session. Meanwhile, Spot gold fell 0.5 percent to $3,310.40 an ounce.
