Stocks Waver, Gold Jumps After Trump-Xi Summit: Markets Wrap
(Bloomberg) — Stocks fluctuated and gold rallied as investors parsed President Donald Trump’s comments about his meeting Chinese leader Xi Jinping after their summit aimed at reducing trade tensions between the world’s largest economies.
US equity-index futures fell 0.1% after Trump said he had an “amazing meeting” with Xi and would reduce fentanyl tariffs from 20% to 10% effective immediately. Contracts for the Nasdaq 100 index slipped 0.2% as Trump said he had discussed Chinese access for Nvidia Corp.’s chips but indicated that he would not offer access to their most advanced Blackwell line. A gauge of Asian shares fell 0.2%, erasing their earlier gains. Chinese indexes also retreated.
A gauge of the dollar trimmed gains from the prior session. Treasuries recouped some of their losses with the yield on the 10-year declining one basis point to 4.06%. The yen fluctuated against the dollar after the Bank of Japan held its policy rate. Gold jumped 1.2%.
“Equities traded higher into the Trump-Xi meeting but were then underwhelmed by the lack of detail,” said Anna Wu, cross-asset strategist at Van Eck Associates Corp. “Markets view this as a tactical truce rather than a long-term deal, meaning the medium-term outlook could stay volatile,” she said.
Investors were speculating that the US-China meeting would help ease the world’s largest trade dispute and steady global markets after months of tension. Since the tariff-fueled meltdown in April, the S&P 500 has surged on optimism about AI and hopes for Federal Reserve interest-rate cuts. Instead, the Fed on Wednesday cautioned investors that a cut in December isn’t a foregone conclusion.
Trump said he had an “amazing meeting” with Xi that resulted in a trade deal that would see the US halve fentanyl-related tariffs on Chinese goods effective immediately.
The deal will also see China resume soybean purchases and pause its rare-earths licensing regime for at least a year, Trump said.
Earlier, following the Fed’s expected rate cut, Powell’s caution about future moves and his focus on labor market risks led investors to scale back easing bets.
Fed officials delivered their second straight rate reduction Wednesday to support a softening labor market, and said they would stop shrinking the portfolio of assets on Dec. 1. Governor Stephen Miran dissented again in favor of a larger reduction. Kansas City Fed President Jeff Schmid said he preferred not to cut rates at all.
Technology sector remained in focus after Samsung Electronics Co.’s earnings beat estimates, and megacap US companies boosted bets on the artificial intelligence theme.
Investors also got a chance to price in tech companies spending on artificial intelligence after earnings from megacaps. Three bellwethers – Alphabet Inc., Meta Platforms Inc. and Microsoft Corp. — together racked up some $78 billion in capital expenditures last quarter. That’s up 89% from a year earlier.
Their earnings were mixed. Meta Platforms shares fell 7.4% in extended trading while Alphabet jumped 6.7%. Microsoft fell almost 4%. Earlier in the US trading day, Nvidia Corp. became the first company to reach $5 trillion in market valuation.
Corporate News:
Artificial intelligence startup OpenAI is preparing to file for an initial public offering as soon as next year that may give the company a market capitalization of $1 trillion, Reuters reported. Toyota Motor Corp. has no plans to sweeten a deal involving a proposed ¥4.7 trillion ($31 billion) buyout of Toyota Industries Corp., Chief Executive Officer Koji Sato said, rebuffing widespread criticism of a planned privatization bid. California Public Employees’ Retirement System, the largest public pension plan in the US, is planning to vote against Elon Musk’s $1 trillion Tesla Inc. compensation agreement. Bank of America Corp., Citigroup Inc. and Morgan Stanley are among about 20 banks that have joined a $20 billion debt financing backing the buyout of Electronic Arts Inc. AirAsia Aviation Group plans to raise as much as $600 million, replacing a private credit facility with a lower-interest bearing bond. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 2:20 p.m. Tokyo time Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 fell 0.5% Hong Kong’s Hang Seng fell 0.7% The Shanghai Composite fell 0.4% Euro Stoxx 50 futures fell 0.1% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1628 The Japanese yen was little changed at 152.83 per dollar The offshore yuan was little changed at 7.1017 per dollar Cryptocurrencies
Bitcoin fell 2.3% to $108,943.42 Ether fell 2.2% to $3,865.59 Bonds
The yield on 10-year Treasuries declined one basis point to 4.06% Japan’s 10-year yield was unchanged at 1.650% Australia’s 10-year yield advanced eight basis points to 4.30% Commodities
West Texas Intermediate crude fell 0.5% to $60.17 a barrel Spot gold rose 0.7% to $3,958.51 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi.
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