Stocks in the US have soared after the US and China stepped back from a recent trade war.
The SPX 500 is now testing resistance at the 5,796 level and that is now the barrier to the previous highs near
The two economic powerhouses agreed to cut tariffs and de-escalate their trade war. Risk-on sentiment returned to asset markets after Treasury Secretary Bessent said trade talks with China were “very robust and productive.” The US and China have agreed to temporarily lower tariffs on each other’s products for three months, with the US reducing its tariffs on China from 145% to 30% and China reducing its duties from 125% to 10%. Treasury Secretary Bessent said that neither nation wants to “decouple” and that further talks might lead to “purchasing agreements” by China.
Markets will now see the end to the most important aspect of the trade wars and buyers could return. The markets will also be looking at some data from the US such as retail sales. Traders are now discounting the chances at 8% for a -25 bp rate cut after the June 17-18 FOMC meeting.
Earnings season continues and data compiled by Bloomberg Intelligence, said the market consensus is for Q1 year-over-year earnings growth of +6.7% for the S&P 500 stocks, down from expectations of +11.1% in early November.
Investors will be hoping that the tariff drama is over and the SPX 500 can aim for the previous market high.