US stock futures rose Sunday after US and Chinese representatives agreed on a framework for a trade deal, potentially averting a tariff hike to 157% on Chinese goods and as investors expect another interest rate cut from the Federal Reserve.
Dow futures were up 0.65%, S&P 500 futures rose 0.74% and Nasdaq futures climbed 0.92%, as of 6:29 p.m. ET.
The Dow closed above 47,000 for the first time Friday after September’s Consumer Price Index data showed annual inflation had heated up but less than expected. The news boosted expectations that the central bankers will cut interest rates at the policy meetings this week.
It was a positive sign for the market, which underwent a massive sell-off after trade tensions revved up between the two global superpowers earlier this month.
In Asia, major stock markets also responded positively to the news. Japan’s benchmark Nikkei 225 index rose 1.9% in early hours of trading on Monday. South Korea’s Kospi jumped 2.4%. Hong Kong’s Hang Seng index was also trading up 1.28% in early trading.
President Donald Trump is expected to meet with Chinese leader Xi Jinping this Thursday in South Korea, wrapping up the US president’s diplomatic tour of Southeast Asia with one of America’s most important trade partners.
Relations between Washington and Beijing became strained after China announced it would ramp up export restrictions on critical rare-earth minerals, which are used to make electronics such as satellites and consumer devices.
Trump responded by threatening to ramp up duties an additional 100% “over and above” existing rates, to which Beijing threatened countermeasures against the United States.
On Sunday, Treasury Secretary Scott Bessent expressed optimism ahead of Xi and Trump’s meeting in South Korea.
“I think we’ve reached a substantial framework for the two leaders who will meet next Thursday … that tariffs will be averted,” Bessent said on ABC’s “This Week” from Kuala Lumpur, Malaysia.
Trump on Saturday indicated he was open to making some concessions as he suggested a “very good chance of making a very comprehensive deal.”
Bessent did not provide details about the framework but said on NBC’s “Meet the Press” that he anticipates the US would get “some kind of deferral” on rare-earth export controls. China controls more than 90% of the global output of refined rare earths, and that abundance has become one of its most potent tools in trade discussions with the US.
The tariff war has had sprawling effects on the US economy, from inflation to farmers and American businesses.
The deal, which will likely be finalized when the leaders of the two global superpowers meet this week, is expected to include a break for farmers — particularly soybean farmers, who have been hit hard by the strained trade relationship.
China was once the largest buyer of American soybeans ($12.5 billion in 2024), but has not purchased any US soybeans since May, according to US Department of Agriculture data in late September.
CNN’s John Towfighi and John Liu contributed to this report.
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