Wall Street cautiously rallied this week as investors bet on a softer tone from President Donald Trump regarding his trade war with China. On Friday, the president announced that the next round of US-China trade talks will take place on Monday.
The S&P 500 closed at its highest level since February, while the Dow Jones Industrial Average rose 443 points or 1.05%. The tech-heavy Nasdaq Composite also gained 1.2%, with many major indexes experiencing back-to-back weeks of gains.
Trump’s announcement comes amid ongoing tensions between the US and China over trade, with the two countries engaging in a punishing tariff war. However, Trump expressed optimism about the talks, saying they should go “very well.” He also noted that uncertainty over tariffs remains, but stock markets are looking forward to an eventual thawing of trade fears.
Jobs data, including a slightly better-than-expected jobs report, also contributed to the market’s recovery. Tesla, which had plummeted 14% on Thursday after Trump and CEO Elon Musk traded barbs on social media, rebounded with a 3.67% gain. The company’s market value is still down about $119 billion across the past two days.
Analysts are expecting fewer rate cuts from the Federal Reserve this year due to a resilient labor market. Bond yields rose as traders reduced their expectations for rate cuts, and Wall Street will be closely watching the US-China trade talks on Monday.
Despite the uncertainty surrounding Trump’s tariff policy, investors remain cautiously optimistic about the markets. The odds of the Fed cutting rates in July fell to 16% from 30% one day ago, according to the CME FedWatch tool. Analysts expect the next potential rate cut to come in September.
Source: https://edition.cnn.com/2025/06/06/investing/us-stock-market