Wall Street Wakes Up Bullish as Trump Talks Up China Deal on Asia Tour

Reuters, AP, and Bloomberg contributed to this report.

US stocks look set to extend last week’s record run after President Donald Trump, traveling through Asia, said he expects to clinch a trade agreement with China. Futures were broadly higher before the opening bell, with S&P 500 contracts up about 0.9%, Dow futures ahead 0.5%, and the tech-heavy Nasdaq 100 jumping 1.3% as chipmakers led the charge. Nvidia added roughly 2.5% premarket and Micron climbed more than 4%.

The upbeat tone isn’t just about geopolitics. It’s a monster week for earnings from the mega-caps — Google, Meta, Microsoft, Apple and Amazon — and it lands right on top of the Federal Reserve’s meeting, where another quarter-point rate cut on Wednesday is widely expected. Strong single-name moves are already popping: Keurig Dr Pepper rose about 3.7% after topping profit forecasts and tightening guidance higher.

Trump’s comments followed a swing through Southeast Asia, where he said he has “a lot of respect” for China’s Xi Jinping and predicted, “I think we’re going to come away with a deal.” The two are expected to meet on the sidelines of the APEC summit after Trump stops in Japan and South Korea. Traders are reading that as a de-escalation signal, and Asian markets obliged with a rally.

Japan’s Nikkei 225 ripped 2.5% to 50,512.32, a fresh record close, helped by optimism over newly installed Prime Minister Sanae Takaichi’s market-friendly stance and plans to raise defense spending. That enthusiasm spilled into defense and industrial names; Kawasaki Heavy Industries surged around 9%, IHI advanced nearly 3%, and Hitachi gained more than 3%. Tokyo chatter even includes a novel trade-sweetener: as part of talks with Washington, Japan has floated buying a fleet of Ford F-150s for infrastructure inspections, a nod to long-running tensions over autos. Across the region, the risk-on mood was plain — Hong Kong’s Hang Seng rose about 1.1%, Shanghai added 1.2%, South Korea’s Kospi pushed 2.6% to a record, Australia’s ASX 200 edged higher, and benchmarks in Taiwan and India also gained.

The relief rally sits against a mixed macro backdrop. APEC’s latest outlook pegs growth across the Pacific Rim at about 3% this year, down from 3.6% in 2024, reflecting lingering tariff frictions. Still, Friday’s softer-than-feared US inflation update has Wall Street betting the Fed can keep trimming rates to support a cooling job market. That’s particularly meaningful for lower- and middle-income households still digesting elevated prices, and it greases the skids for risk assets. As SPI Asset Management’s Stephen Innes put it, this round of US–China diplomacy isn’t just for the cameras; negotiators have mapped a framework that could prevent another round of tariff whiplash.

Europe was steadier by comparison, with the DAX and CAC 40 up a whisper around midday and the FTSE 100 flat. In commodities, crude eased after last week’s near-8% pop tied to fresh US and EU sanctions on Russian oil — West Texas Intermediate hovered near $61 a barrel and Brent around $64.80 as traders weighed sanctions-driven supply worries against hopes for a broader trade thaw.

With trade headlines turning friendlier, mega-cap earnings on deck, and a likely Fed cut midweek, bulls have the wind at their backs. Now they need the numbers — and the handshake — to match the mood.