Stocks experienced solid gains on Monday, buoyed by President Donald Trump’s optimistic remarks regarding U.S.-China trade negotiations. Investors are also looking forward to the Federal Reserve’s upcoming meeting, anticipated to include the first interest rate cut of the year.
By the close of the trading day, the tech-heavy Nasdaq Composite climbed 0.9% to finish at 22,348, while the broader S&P 500 recorded a gain of 0.5%, ending at 6,615, marking a new record. The Dow Jones Industrial Average edged up 0.1% to 45,883.
Continuing trade discussions between high-level officials from the U.S. and China entered their second day, with President Trump sharing positive updates on his Truth Social account, stating that the “big Trade Meeting … has gone VERY WELL!” He also referenced a deal concerning a “certain” company that appeals to young Americans, likely alluding to TikTok. With a deadline approaching for its parent company ByteDance to divest or face a shutdown in the U.S., Trump revealed plans to meet with Chinese President Xi Jinping on Friday to discuss the details.
In addition to trade talk updates, Trump expressed his views on interest rates ahead of the Federal Reserve’s meeting. He stated, “‘Too Late’ MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND. HOUSING WILL SOAR!!!” As traders positioned themselves, futures data indicated a 96% likelihood that the Federal Open Market Committee would implement a quarter-percentage-point cut. However, the odds for a larger half-percentage-point cut lingered at about 4%, according to industry analysts. Jonathan Millar, a senior U.S. economist at Barclays, suggested it was improbable for the Fed to opt for a more substantial reduction, citing a stabilized labor market and gradual price pressures.
In corporate news, Nvidia’s shares saw a slight decline of 0.04% following allegations from China that the tech company breached anti-monopoly laws during its 2020 acquisition of Mellanox, a data center solutions provider. The announcement came alongside ongoing trade talks, with Treasury Secretary Scott Bessent commenting on the “poor timing” of the investigation. In response, Nvidia maintained that it complies with all laws and would cooperate with government evaluations regarding export controls.
Meanwhile, Tesla’s stock also attracted attention after CEO Elon Musk disclosed a significant stock purchase. Musk acquired 2.57 million shares, totaling around $1 billion, marking his largest insider purchase to date. Following the announcement, Tesla’s stock rose more than 7% at its peak before settling at a 3.6% increase. Analyst Daniel Ives from Wedbush reaffirmed his Outperform rating, projecting a $500 price target for the stock, attributed to the expected growth opportunities amid the AI revolution and the prospective launch of Robotaxi services.
As market participants navigate these developments, the implications of trade negotiations, interest rates, and corporate maneuvers continue to shape the financial landscape.
