A regional stock gauge opened 0.2% higher with gains of 0.8% in Japan. Stocks in Australia and South Korea also advanced. Futures contracts for the S&P 500 and the Nasdaq 100 were flat. The offshore yuan edged up, giving modest gains for the Australian and New Zealand dollars – the latter currencies being proxies for China.
Expert controls may “come down” if rare earths and magnets licenses are resolved with China, said Commerce Secretary Howard Lutnick. If presidents of both countries agree, then US and China will implement the plan, he said. The two sides agreed in principle to a structure for implementing the consensus they reached in Geneva last month, China’s trade representative Li Chenggang told reporters after talks in London.
Financial markets are closely watching if the world’s largest economies can find a way to de-escalate the trade war that economists say have tipped the world economy into a downturn, with the US among the hardest hit. Global stocks have recovered from their April lows as President Donald Trump suspended his ‘Liberation Day’ tariffs until July 9 and countries including Japan and India try to arrive at deals to lower the levies.
“Markets will likely welcome the shift from confrontation to coordination,” said Charu Chanana, chief investment strategist at Saxo Markets. “But the absence of further scheduled meetings signals that we’re not out of the woods yet—it’s now up to Trump and Xi to approve and enforce the deal.”
Talks in London came after the US and China accused each other of reneging on a deal reached in May in Geneva, where they tried to start dialing back the trade war.
Ahead of the talks, China granted approval to some applications for the export of rare earths. Boeing Co. has also begun shipping commercial jets to China for the first time since early April, indicating a reopening of trade flows.
Meanwhile, data Wednesday is expected to show US consumers probably saw slightly faster inflation in May, notably for merchandise, as companies gradually pass along higher import duties. That may reinforce the Federal Reserve’s wait-and-see stance toward further easing as it assesses the impact of tariffs, with traders increasingly betting that the central bank will cut interest rates just once this year.
Prices of goods and services, excluding volatile food and energy costs, are expected to show a 0.3% advance in May, the most in four months.
The so-called core consumer price index, which is regarded as a better indicator of underlying inflation, is seen accelerating for the first time this year — to 2.9% — on an annual basis, based on the median projection.
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