Topline
The S&P 500 reached a record high Monday, one day after the U.S. and China agreed to a trade pact framework that could prevent a broader trade war, news that sent gold prices tumbling.
Chinese President Xi Jinping and U.S. President Donald Trump will meet Wednesday. (Photo by Thomas Peter-Pool/Getty Images)
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Key Facts
The S&P 500 closed up 1.2%, keeping weeks of positive momentum alive and marking its highest closing price of all time at 6,875.
Gold futures fell below $4,000 at times Monday and had dropped more than 3% on the day as of just after 4 p.m. EDT.
Gold was pacing for its fifth price drop in the last six trading sessions following a drop of more than 5% on Tuesday, its largest single-day decline in more than a decade as investors took profits en masse following the precious metal’s historic surge over the past few months.
The S&P 500’s surge was led by tech companies like Tesla (4.3%), Alphabet (3.6%) and Nvidia (2.8%), which boosted the tech-heavy Nasdaq Composite even more, closing up almost 2% to a new record high of 23,637.
The Dow Jones Industrial Average closed at a record high of 47,544 points, up 0.7%.
The U.S. and China reached a framework on a trade deal Sunday, according to multiple outlets, signaling a potential withdrawal of the 100% tariffs threatened by President Donald Trump two weeks ago.
Trump and China President Xi Jinping will meet on Wednesday to discuss the trade truce further.
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Qualcomm Chip Announcement Rockets Qcom Stock
Qualcomm, which accounts for far less weight on the S&P 500 than Tesla, Alphabet and Nvidia, rocketed 11% in trading after announcing it will launch its own semiconductor chips next year, directly challenging Nvidia.
Key Background
Trump threatened an additional 100% tariff against China early this month after the country announced it would require foreign companies to receive Chinese government approval to export products with rare earth minerals. China’s rare earth mineral reserves accounted for 70% of rare earths in the world from 2020 to 2023. The clampdown on rare earths also included a requirement to explain products’ intended use. Trump accused China of trying to “clog” markets and said the export crackdown “is absolutely unheard of in International Trade, and a moral disgrace in dealing with other Nations.” If trade talks fall through and Trump follows up on his tariff threats, the new 100% duties would stack on top of the 30% tariffs the U.S. has already placed against China. However, a successful deal could avoid the tariff hike and delay China’s rare earth export requirements, CNBC reported, noting it may also include resumption of Chinese purchases of American soybeans, a top cash crop. China, once the top buyer of U.S. soybeans, has not purchased the good since April.
Further Reading
Trump Says U.S. Will Impose 100% Tariffs Against China Following Mineral Trade Dispute (Forbes)
Gold Prices Fall Most Since 2013—Here’s Why Metals Are Plunging (Forbes)