US stocks experienced a significant surge on Monday, driven by heightened optimism regarding a potential breakthrough in the ongoing US-China trade dispute. President Donald Trump indicated that a “very successful framework” could emerge from his upcoming meeting with Chinese President Xi Jinping later this week, which ignited positive momentum across Wall Street.
The Dow Jones Industrial Average rose by 208 points, or 0.5%, concluding the day at 47,412.74. The S&P 500 increased by 0.9%, surpassing 6,850 for the first time, while the Nasdaq Composite experienced a 1.5% jump to reach 23,561.57, setting new intraday record highs for all three major indices. This rally was supported by encouraging signs of progress before Trump’s meeting with Xi in South Korea.
Treasury Secretary Scott Bessent confirmed that a “substantial framework” was in place for discussions, further amplifying investor confidence. Additionally, China announced a “preliminary consensus” aimed at resolving core trade issues. Trump expressed his respect for Xi, stating, “I think we’re going to come away with a deal,” which spurred further investor enthusiasm.
The optimistic atmosphere in the market aligns with an exciting week ahead, packed with significant events including the Federal Reserve’s rate decision, a series of earnings reports from major tech companies, and the anticipated Trump-Xi summit. Market expectations are leaning toward a potential rate cut from the Fed on Wednesday, following recent data indicating softer inflation.
Chipmakers played a pivotal role in Monday’s market upswing, benefiting notably from improved trade sentiment. Nvidia saw an increase of over 2%, while Broadcom rose by 1%. Qualcomm led the sector with an impressive 14% jump, reaching a new all-time high after announcing its AI200 and AI250 chips designed for data centers. This strategic move positions Qualcomm in direct competition with industry leaders Nvidia and AMD, as it seeks to expand its footprint in the rapidly evolving AI server market.
In the broader tech sector, companies such as Tesla gained 2.4% after board chair Robyn Denholm urged shareholders to approve Elon Musk’s substantial pay package, highlighting the potential consequences of failing to retain Musk’s leadership. Apple approached a $4 trillion market cap with a 1% rise, while other giants including Microsoft, Amazon, Alphabet, and Meta all advanced more than 1%. The “Magnificent Seven,” which encompasses these tech powerhouses, is expected to report third-quarter results this week, with Microsoft, Alphabet, and Meta scheduled for Wednesday, followed by Apple and Amazon on Thursday.
Investor enthusiasm was also buoyed by economic data from China, which reported a 14% year-over-year increase in non-ferrous mining and refining activity, including rare earth minerals. This report underscores China’s dominant position in critical raw materials, controlling approximately 70% of global rare earth extraction and around 90% of processing capabilities. Despite the overall positive trade sentiment, stocks of rare earth producers suffered as MP Materials plummeted by 11.1%, and other companies such as USA Rare Earth and NioCorp also reported declines.
Market analysts pointed out that China is likely to resume purchases of US soybeans and delay new rare-earth export licensing rules by one year—additional signals indicative of easing trade tensions. Bessent mentioned, “I believe we’ve reached a substantial framework that will avoid a tariff hike,” further solidifying bullish sentiments among investors.
With Wall Street reaching record highs, heightened expectations for corporate earnings, and rising optimism about US-China trade relations, analysts speculate that a successful outcome from the Trump-Xi meeting could propel the Dow, S&P 500, and Nasdaq to new heights, extending the rally deeper into November. As investors await key developments, Monday’s trading session sets a promising tone for what could unfold over the coming days.
