US stocks inched up on Monday, as investors turned their attention to renewed U.S.-China trade talks, with hopes for a de-escalation in tensions. The S&P 500 rose 0.3%, surpassing the 6,000 mark for the first time since February. The Dow Jones Industrial Average gained 0.2%, while the Nasdaq Composite increased by 0.5%.
Market sentiment lifted amid reports that trade discussions between the US and China resumed in London, after a phone call between President Trump and Chinese President Xi Jinping. Investors are looking for signs that both sides are willing to dial back their tariff demands and reach a more permanent agreement, after the Geneva pact in May had shown some early promise but was followed by renewed disagreements.
Market Movers:
- Tesla (TSLA): +1.3%: Tesla shares rose slightly on Monday, recovering from a steep drop. Investors are closely watching Tesla’s upcoming robotaxi test, which is set to begin on June 12 in Austin, Texas. Despite ongoing tension between CEO Elon Musk and President Trump, investors are hopeful about the company's future prospects.
- IBM (IBM): +1.4%: IBM reached an all-time high on Monday, beating a market capitalization of $250 billion for the first time in the company’s history. The stock has surged more than 23% year-to-date, fueled by strategic acquisitions that have allowed the company to expand its offerings in the high-growth software and services market.
- Lululemon (LULU): -19.5%: The stock plummeted by more than 20% in midday trading after the activewear giant warned of potential profit losses amid a challenging macroeconomic environment. The company reduced its full-year earnings per share outlook, sparking concerns about slowing growth and its ability to navigate a volatile retail landscape.
- Circle (CRCL): +9%: Circle's stock continued its impressive run following its blockbuster IPO last week, surging another 9% on Monday. The stablecoin issuer’s market debut has sparked renewed interest in digital assets and fintech, with the company’s market cap climbing to roughly $24 billion.
US-China Trade Talks Spark Optimism
The market rallied on Monday in response to the latest developments in US-China trade talks, which started in London. The discussions have investors hoping for a resolution to the ongoing tariff dispute. The stakes are high, as both countries have levied tariffs on each other's goods, which has affected global trade and led to rising costs for consumers and businesses. If progress is made in the talks, it could signal a broader improvement in international trade relations and economic growth.
While trade uncertainty has weighed heavily on markets in recent months, the positive tone around the current round of negotiations helped lift investor sentiment. Any indications that the US and China are moving toward a lasting trade agreement could provide significant relief to the markets, especially as both economies are feeling the impact of ongoing tariffs.
Labor Market Resilience and the Fed’s Next Move
The US labor market showed resilience, as the latest data revealed 139,000 new jobs were added in May, surpassing expectations of 126,000. Unemployment remained steady at 4.2%. While the growth in jobs was slower than in previous months, the number was still encouraging amid ongoing global uncertainties and trade disruptions.
The strong jobs report may influence the Federal Reserve’s approach to monetary policy, with market participants awaiting further clues on whether the central bank will cut rates in response to slower growth and inflation concerns. President Trump continued to criticize the Fed for its rate policy, urging the central bank to take more aggressive action to stimulate economic growth. Investors are closely watching the Fed’s next steps, particularly in light of the upcoming consumer inflation data later this week.
Looking Ahead
Looking ahead, all eyes will be on the outcome of the US-China trade talks. Any positive developments in the negotiations could lead to a further market rally, especially in sectors like tech and manufacturing, which are most affected by tariffs. Additionally, investors will be focusing on the upcoming US consumer inflation data, which will provide further insight into the health of the economy and the Fed’s future actions.
While the IPO market has seen a strong debut from Circle, investors remain cautious given the continued uncertainty surrounding global trade policies. As more companies look to go public, the direction of the IPO market will depend largely on the broader economic environment and the resolution of key geopolitical tensions.