Bonds & Stocks
Stocks retreated as traders navigated a US-China trade truce, mixed technology earnings and a cautious Federal Reserve amid a host of moving parts shaping markets. S&P 500 futures fell 0.2% after the index ended flat on Wednesday. While President Donald Trump hailed an “amazing meeting” with Chinese counterpart Xi Jinping, where both sides agreed to roll back export controls and ease other trade barriers, the summit is expected to stabilize relations rather than resolve deeper differences. Meanwhile, shares of the Magnificent Seven tech heavyweights, the driving force behind the US stock rally, diverged widely in premarket trading.
Economy
Donald Trump and Xi Jinping agreed to extend a tariff truce, roll back export controls and reduce other trade barriers in a landmark summit on Thursday, potentially stabilizing relations between the world’s biggest economies after months of turmoil. In the first sit down between the leaders since Trump’s return to the White House, the pair agreed China would pause sweeping controls on rare-earth magnets in exchange for what Beijing said was a US agreement to roll back an expansion of restrictions on Chinese companies. The US will also halve fentanyl-related tariffs on Chinese goods, while Beijing resumes purchases of soybeans and other American agricultural products.
World
The euro-area economy expanded more than anticipated, displaying resilience to higher US tariffs with France recording its strongest growth in over two years. Third-quarter gross domestic product rose 0.2% from the previous three months, up from 0.1% in the second, Eurostat said Thursday. Analysts in a Bloomberg survey had estimated another 0.1% advance. France was the main reason behind the positive surprise, reporting a jump of 0.5% in output thanks to trade and domestic demand. Germany, the region’s largest economy, joined Italy in stagnation with both narrowly avoiding recessions. Data a day earlier showed another strong quarter for Spain, a persistent outperformer.