Nasdaq 100 and S&P500: U.S.-China Trade Truce Hopes Trigger Risk Bid Across U.S. Indices

Index Futures Climb on Signs of U.S.-China Trade Truce

Stock index futures rose sharply Monday after U.S. and Chinese officials signaled progress toward a temporary trade agreement, boosting risk sentiment ahead of Thursday’s high-level meeting between President Trump and President Xi. Dow futures advanced over 200 points, with chipmakers and megacap tech leading premarket gains.

S&P 500 futures climbed 0.9%, while Nasdaq 100 contracts jumped 1.2%, led by semiconductor names like Nvidia, AMD, and Broadcom—each up around 2%. The Dow Jones Industrial Average futures gained 321 points, or 0.7%, following last week’s record-setting close above 47,000.

What’s Driving the Trade Optimism?

Markets responded to reports that Beijing may postpone rare earth export restrictions and resume U.S. soybean purchases. In return, the U.S. is expected to suspend the threatened 100% tariffs on Chinese imports originally slated for November 1. Treasury Secretary Scott Bessent described the weekend negotiations as producing a “successful framework” for the Trump-Xi meeting in South Korea.

Trump echoed the sentiment, saying from Air Force One that a deal is likely and he has “a lot of respect for President Xi.” Wolfe Research noted the likelihood of China delaying rare earth restrictions for a full year, a move seen as more favorable than previously expected licensing arrangements.

How Are Sector and Stock Moves Reflecting the News?

Semiconductor stocks rallied on the trade optimism, given their heavy exposure to Chinese demand. Nvidia, Broadcom, and AMD led the early surge. Meanwhile, rare earth miners fell sharply. Critical Metals dropped 8.5%, USA Rare Earth slid 7.2%, and MP Materials declined over 5% in premarket trading.

Tech names also advanced, with Apple and Tesla up nearly 1%, as investors anticipate third-quarter earnings from several major players in the sector this week, including Alphabet, Microsoft, Meta, and Amazon.

What Else Are Traders Watching This Week?

Beyond trade, attention shifts to Wednesday’s Federal Reserve policy decision. While a 25-basis-point rate cut is widely anticipated, Chair Jerome Powell’s post-meeting remarks may offer clearer direction on future monetary policy. Treasury yields edged up slightly, with the 10-year note rising 2 basis points to 4.04%.

Economic sentiment also found support from last week’s softer inflation print, reinforcing expectations of continued Fed accommodation. Gold declined 1.3% to $4,083 per ounce, while Bitcoin rose 3.6% to $115,728.

Outlook: Bullish Momentum Hinges on Thursday’s Meeting

Markets are currently pricing in a favorable outcome from the Trump-Xi summit. A formalized truce would likely support further gains in equities, especially in tech and industrial sectors. However, traders should remain cautious of headline risk until the agreement is signed. Alongside earnings and the Fed’s decision, Thursday’s meeting will be pivotal in shaping short-term market direction.

More Information in our Economic Calendar.