Economic markets reacted to the U.S.-China tariff talks over the weekend, with promising signals from both sides. While no official announcements were made regarding tariffs, the White House hinted at a potential deal to address America’s trade deficit, while China mentioned establishing a “mechanism” for future discussions on trade and the economy.
Investors responded positively on Sunday to the progress made in the trade talks. Futures for major indices showed significant gains, with the Dow Jones Industrial Average increasing by 0.97%, S&P 500 by 1.15%, and Nasdaq by 1.45%. President Trump’s announcement of an executive order to reduce prescription drug prices slightly impacted Dow futures.
In the currency markets, the dollar strengthened against the euro and yen. Meanwhile, gold prices declined, and the 10-year Treasury yield saw a minor increase. Oil prices also rose slightly.
Treasury Secretary Scott Bessent expressed optimism about the progress made in the talks, promising a detailed briefing on Monday. U.S. Trade Representative Jamieson Greer hinted at a positive outcome, emphasizing the importance of addressing the trade deficit.
Both countries agreed to establish a consultation mechanism for future discussions on trade and economic issues, indicating progress in the talks. Although a comprehensive trade deal was not reached over the weekend, the optimistic comments from both sides suggested a reduction in trade tensions.
Market analysts anticipate further details on the tariff talks and key economic reports in the upcoming week, including the consumer price index, producer price index, retail sales, and industrial production data. Federal Reserve officials are also scheduled to make statements, following the central bank’s decision to maintain interest rates.
