US stocks surge as Washington, Beijing reach trade framework

By Al Mayadeen English
Source: Agencies
27 Oct 2025 17:39

US stocks climbed as Washington and Beijing reached a preliminary trade framework to delay new tariffs, suspend Chinese rare-earth export restrictions, and resume US agricultural exports.

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A board above the trading floor of the New York Stock Exchange displays the closing number for the Dow Jones industrial average, Monday, Oct. 20, 2025 (AP Photo/Richard Drew)

Wall Street began the week on a positive note as investors welcomed fresh indications of progress in US-China trade talks and awaited a key Federal Reserve decision alongside major corporate earnings.

Chinese state media said Monday that Washington and Beijing had reached a "framework consensus" on a trade deal that includes commitments to delay new tariffs and suspend China's planned export restrictions on rare-earth minerals.

The arrangement also involves China resuming large-scale purchases of US agricultural products such as soybeans and exploring cooperation on fentanyl precursor chemicals, signaling movement toward resolving longstanding disputes between the two economic powers.

Market Rally

The update followed a call between Chinese Foreign Minister Wang Yi and US Secretary of State Marco Rubio, during which Wang said the two sides had found "reciprocal solutions to current pressing economic and trade issues," according to state broadcaster CCTV.

"One of the surest ways to get this market to rally is to have positive stories about trade negotiations," Steve Sosnick of Interactive Brokers told AFP, noting that investors have repeatedly responded favorably to signs of diplomatic progress.

At the open, the Dow Jones Industrial Average gained 0.5 percent to 47,457.85, while the S&P 500 rose 0.9 percent to 6,849.62. The Nasdaq Composite Index jumped 1.4 percent to 23,531.57, reflecting strong enthusiasm for tech shares.

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Trade Momentum

The optimism comes ahead of a planned meeting between US President Donald Trump and Chinese President Xi Jinping later this week. Both leaders are expected to review and potentially formalize the framework, which aims to stabilize trade relations after years of tariffs and retaliatory measures.

Meanwhile, markets are also positioning for an expected interest rate cut from the Federal Reserve on Wednesday and digesting a heavy lineup of earnings reports from major technology firms, including Microsoft and Amazon.

In corporate developments, Huntington Bancshares saw its shares fall 3.2 percent after announcing plans to purchase Cadence Bank in a $7.4 billion all-stock deal. Shares of Cadence climbed 4.1 percent following the news, marking the latest in a wave of consolidation among regional banks.