Stock futures rise after U.S., Chinese officials agree on trade deal framework

U.S. stock futures rose Sunday after U.S. and Chinese officials agreed on a framework for a trade deal, potentially avoid an increase in customs duties 157% on Chinese products and that investors expect a further cut in interest rates from the Federal Reserve.

Dow futures were up 0.65%, S&P 500 futures were up 0.74% and Nasdaq futures were up 0.92%, as of 6:29 p.m. ET.

The Dow Jones closed above 47,000 for the first time on Friday following the release of September Consumer Price Index data. annual inflation had warmed up but less than expected. The news reinforced expectations that central bankers would cut interest rates at policy meetings this week.

This is a positive sign for the market which has experienced massive liquidation after the resurgence of trade tensions between the two global superpowers earlier this month.

President Donald Trump is expected to meet with Chinese leader Xi Jinping this Thursday in South Korea, concluding the U.S. president’s diplomatic ties. Southeast Asia tour with one of the United States’ most important trading partners.

Relations between Washington and Beijing became strained after China has announced it will tighten export restrictions on critical rare earth minerals, which are used in the manufacturing of electronic products such as satellites and consumer devices.

Trump responded by threatening to raise tariffs by an additional 100% “on top of” existing rates, to which Beijing threatened to take countermeasures against the United States.

On Sunday, Treasury Secretary Scott Bessent expressed optimism ahead of Xi’s meeting with Trump in South Korea.

“I think we have reached a substantive framework for the two leaders meeting next Thursday … that tariffs will be avoided,” Bessent said on ABC’s “This Week” from Kuala Lumpur, Malaysia.

Trump indicated Saturday that he was willing to make some concessions, suggesting there was a “very good chance of reaching a very comprehensive agreement.”

Bessent did not provide details on the framework, but said on NBC’s “Meet the Press” that he anticipated the United States would get “some sort of deferral” on rare earth export controls. China controls more than 90% of the world’s production of refined rare earths, and this abundance has become one of its most powerful tools in trade negotiations with the United States.

The tariff war has had widespread effects on the U.S. economy, from inflation to American farmers and businesses.

The deal, which will likely be finalized when the leaders of the two world superpowers meet this week, is expected to include a break for farmers, particularly soybean producers, who have been hit hard by strained trade relations.

China was once the largest buyer of U.S. soybeans ($12.5 billion in 2024), but has not purchased any U.S. soybeans since May, according to U.S. Department of Agriculture data in late September.