US-China trade talks: US futures climb as Bessent-China talks confirmed

S&P 500 contracts rose 0.8% in early Asia trading on news that Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with the Chinese government later this week in Switzerland. The planned talks could buoy investors eager to see a reduction in tariffs that risk crippling trade between the world’s two largest economies.

The dollar climbed against most major currencies following the announcement, while gold fell more than 1%. The Australian dollar edged higher.

Equity futures pointed to gains in Hong Kong, with small declines in Tokyo and Sydney. On Wall Street the S&P 500 closed down nearly 1% after Trump said he would prescribe tariff levels and concessions for partners looking to avoid higher duties, appearing to move away from the idea that he would engage in back-and-forth negotiations. That spurred gains in Treasuries, which also climbed after a solid $42 billion sale of 10-year bonds.

In Asia, China’s central bank and financial regulators will hold a press briefing on Wednesday to discuss policies aimed at stabilizing markets. The briefing will be closely watched as the country faces intensifying pressure from US tariffs and growing concerns over its economic outlook. Elsewhere in the region, traders in Japan will return after a two-day holiday.

Live Events

Ahead of Wednesday’s Fed decision, traders widely expect policymakers to stay on hold. While Trump has been ratcheting up pressure on the central bank to resume cutting rates, officials have mostly emphasized a need to wait and see how trade policies implemented last month affect the economy.“And if traders wish to believe that the Fed will come to the rescue of the world tomorrow and assuage the recent rise in policy uncertainty and political uncertainty with a signal of overt ‘dovishness’, they should think again,” said Thierry Wizman at Macquarie.The S&P 500 fell 0.8% on Tuesday. The yield on 10-year Treasuries declined five basis points to 4.29%. The Bloomberg Dollar Spot Index slipped 0.4%. Gold rose 2.9%, while oil advanced from its lowest closing price in four years.

Following a historic winning run for stocks, Goldman Sachs Group Inc. strategists say current valuations leave little room for the recent rally to continue. For JPMorgan Chase & Co. strategists, US assets are “not a good place to hide.” At HSBC, Max Kettner remains tactically cautious as “fundamentals remain dire.”

Meanwhile, billionaire investor Paul Tudor Jones said he expects Trump to dial back China tariffs by 50%, but said stock markets could hit new lows even if he does.

“You have Trump, who’s locked in on tariffs; you have the Fed, who’s locked in on not cutting rates,” said Jones, founder of macro hedge fund Tudor Investment Corp., speaking on CNBC Tuesday. “That’s not good for the stock market.”