Complete Market OverviewMarkets Mixed as Investors Monitor US-China Trade Developments
Major U.S. stock indexes showed mixed performance Monday as investors closely watched the start of trade talks between the United States and China in London. The Dow Jones Industrial Average fell 75 points, while the S&P 500 remained flat, hovering near record territory. The tech-heavy Nasdaq Composite gained 0.15% as technology stocks continued their recent momentum.
The S&P 500 is currently less than 2.4% away from its all-time record high of 6,144.15 set on February 19, having rallied more than 20% since early April when it approached bear market territory. This remarkable recovery comes after President Trump softened his initial plans for sweeping tariffs, easing investor concerns about potential economic damage.
“Markets have moved higher on tariff postponement and the perception that they will be more moderate than initially announced,” said Richard Saperstein, chief investment officer at Treasury Partners. “We expect markets to remain headline sensitive, as trade deals take time to negotiate and unsettling tariff news is likely to cause volatility.”
US-China Trade Talks Take Center Stage
Today’s meeting between U.S. and Chinese officials in London marks a critical development in the ongoing trade relationship between the world’s two largest economies. The talks follow a phone conversation between President Trump and Chinese President Xi Jinping last Thursday, which helped fuel market optimism about a potential thaw in tensions.
The market’s recent rally reflects growing confidence that the two sides won’t reimpose massive tariffs on one another. Wall Street has experienced historic levels of uncertainty and volatility this year as Trump has gone back and forth on tariff policies, with the S&P 500 slumping in March and early April before steadily regaining ground as the administration paused most tariffs.
Tech Stocks in Focus as Apple’s WWDC Kicks Off
Technology stocks are drawing significant attention today as Apple (AAPL) hosts its highly anticipated Worldwide Developers Conference. Shares of the tech giant were up 0.5% ahead of CEO Tim Cook’s keynote speech scheduled for this afternoon, where the company is expected to unveil its new artificial intelligence strategy.
Other major tech companies showed strength as well, with AI chip leader Nvidia (NVDA) rising more than 1%. Amazon (AMZN), Alphabet (GOOG), Meta Platforms (META) and Broadcom (AVGO) all posted gains, continuing the momentum that has made communication services the top-performing S&P 500 sector last week with a 3.19% increase.
Meanwhile, Tesla (TSLA) fell 1.5%, extending its volatile performance following last week’s public disagreement between CEO Elon Musk and President Trump. Microsoft (MSFT) also edged lower after reaching a record high last week.
Corporate News Driving Individual Stock Movements
In corporate developments, Warner Bros. Discovery (WBD) shares jumped more than 6% after the entertainment giant announced plans to split into two publicly traded companies, separating its cable business from its streaming and studio units.
Trading platform Robinhood Markets (HOOD) and adtech company Applovin (APP) each dropped more than 3%. Both companies were considered potential candidates for inclusion in the S&P 500 ahead of an expected rebalancing of the benchmark index, but no changes were made.
Shares of USDC stablecoin issuer Circle Internet Group (CRCL) surged 17%, building on substantial gains since the company’s IPO last week.
Key Economic Data and Events Ahead
Investors are preparing for a busy week of potential market-moving economic data. The U.S. inflation report for May will be released on Wednesday, with markets closely watching for any signs that recent tariffs are driving up prices. According to recent PMI surveys, U.S. companies have reported the largest rise in prices charged for goods and services since September 2022, partly due to tariff-related supply shortages.
Other important releases this week include U.S. Producer Price Index (PPI) data on Thursday and the University of Michigan consumer sentiment index on Friday, which will provide insights into inflation expectations and household confidence.
Market Outlook
Wall Street banks have been adjusting their year-end projections for the S&P 500 as shifts in trade policy and surprisingly strong economic data have changed the market outlook. Goldman Sachs raised its year-end target for the S&P 500 to 6,100 in May, while Deutsche Bank recently increased its target to 6,550. JPMorgan Chase also raised its year-end target to 6,000 last week.
“Absent major policy surprises, the path of least resistance is to new highs,” analysts at JPMorgan Chase noted in a recent report.
As the S&P 500 approaches a new record high, it will officially end the correction that began on March 13. Historically, the S&P 500 has risen an average of 10% over the next 127 days at the conclusion of a correction, according to Sam Stovall, chief investment strategist at CFRA Research, though he cautions that “meaningful, extended gains are not assured.”
With trade talks underway and critical inflation data on the horizon, market participants will be watching closely for developments that could either sustain the recent rally or introduce new volatility to the stock market today.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.