As U.S. stocks remain flat, trade talks begin in London between the U.S. and China, raising hopes for reduced tariffs. The S&P 500 shows a minimal decrease while investors look for news that might impact the market. Notable corporate movements include a significant rise in Warner Bros. Discovery’s shares and IonQ’s acquisition of Oxford Ionics, contrasted by a drop in Tesla’s stock. Meanwhile, Chinese markets see a rally despite slower export growth and ongoing deflation concerns.
U.S. stocks are relatively stagnant as officials from the U.S. and China convene in London for trade discussions, which some hope will avert an economic downturn. The S&P 500 slipped 0.1%, while the Dow Jones fell by 107 points, or 0.3%. Interestingly, the Nasdaq composite experienced a slight gain of 0.1% in early trading. The meetings will cover several issues causing tension between the two economic giants and could lead to a reduction of tariffs currently paused between the nations.
Market optimism stems from the expectation that President Donald Trump may lower tariffs following trade agreements with various countries. This anticipation has fueled a robust recovery for the S&P 500, which has rebounded nearly 20% since a recent decline. Currently, it is within 2.5% of its all-time high. Still, uncertainty looms over the negotiations following a recent round of talks in Switzerland, contributing to a subdued trading environment on Wall Street. U.S. Treasury yields also reflected this cautious sentiment, remaining steady as the countdown to further developments continues.
In corporate news, Warner Bros. Discovery made a notable move, rising 11.8% after announcing a planned split into two distinct companies. One entity will focus on Warner Bros. Television, HBO Max, and other related brands, while the other will oversee CNN, TNT Sports, and other entertainment sectors. IonQ’s stock increased by 3.2% amidst news of its acquisition of Oxford Ionics for close to $1.08 billion, with most of the deal being settled through IonQ’s stock.
On the flip side, Tesla saw a decline of 3.5% as tensions between Elon Musk and Trump reignite struggles for the electric vehicle maker. Meanwhile, in international markets, European indexes showed modest declines after experiencing gains in Asia. Specifically, Chinese markets thrived despite the recent report revealing a slowdown in exports. China saw its exports grow by 4.8% year-over-year in May, down from over 8% in April. Additionally, there was a drop in consumer prices by 0.1%, marking the fourth consecutive month of deflation. Notably, Hong Kong’s stocks surged 1.6% while Shanghai reflected a 0.4% gain.
In the bond sector, the yield on the 10-year Treasury slightly declined to 4.50%, down from 4.51% on Friday. These developments highlight a day of mixed sentiments as trade talks loom while reassessing market expectations.