Stocks wobbled on US-China trade truce; not a signed deal
·
Gold recovered despite less dovish Fed rate cuts
due to risk aversion; China may allow REMs export only against end-user
certifications
·
The US will not allow AI chip exports to China, but
China also does not need US-origin chips anymore, and has almost attained self-sufficiency
·
As highly expected, the US cuts Fentanyl tariffs on
China from 20% to 10% against China’s similar cuts on US soybeans/agri items,
and subsequent purchase
As of early October 30, 2025, U.S. President Donald
Trump and Chinese President Xi Jinping have concluded their bilateral meeting
in Busan, South Korea, on the sidelines of the Asia-Pacific EconomicCooperation (APEC) summit. The closed-door talks, held at Gimhae International
Airport/Gimhae Air Base, lasted approximately 1 hour and 40 minutes. This has
marked the two leaders' first in-person meeting since Trump's return to the
White House in January 2025 and their last face-to-face since 2019 during
Trump’s 1st term. While no formal joint statement was released,
Trump briefed reporters aboard Air Force One en route to Washington, D.C.,
describing the talks as “amazing” and rating them “12 out of 10.” A one-year
trade framework was agreed upon, with annual renegotiation clauses. Key
concessions include tariff reductions, resumption of U.S. agricultural exports,
and continued flow of rare earth minerals with mandatory end-user
certifications.
Key
Outcomes and Announcements:
Till now,
no formal announcements from either side; but Trump immediately departed South
Korea and gave his usual media bytes from aboard Air Force One.
v Trade Deal
Framework: Trump announced a partial
de-escalation in U.S.-China trade tensions. In exchange for China resuming
purchases of U.S. soybeans and maintaining rare earth exports, the U.S. will
reduce tariffs on Chinese goods. Specifically, the fentanyl-related tariff on
Chinese imports drops from 20% to 10%, effective immediately. Trump described
the agreement as a "great deal" that could be signed soon,
emphasizing it avoids a threatened 100% tariff hike.
v Fentanyl
and Precursor Chemicals: China
committed to stricter crackdowns on fentanyl precursor exports, a key U.S.
demand amid the ongoing opioid crisis.
v Future
Engagements: Trump stated he
plans to visit China in April 2026, with Xi reciprocating in the U.S. later
that year (possibly in Florida (Mar-a-Lago) or White House.
v Tone and
Broader Ties: Both leaders
struck conciliatory notes. Trump called the meeting "amazing" and
rated it a "12 out of 10," praising Xi as "a great leader of a
great country" and their "perfect relationship."
Trump, Xi
Kicked Off Pivotal Trade Talks at South Korea Summit
v US President Donald Trump said he and Chinese
President Xi Jinping would have “a very successful meeting” on Thursday to ease
the trade tensions that have rattled global markets.
v The two leaders met and shook hands at an air base
in Busan on the sidelines of the APEC summit in South Korea. “I think we’ve
already agreed to a lot of things and will agree to some more right now,” Trump
said, calling Xi a “tough negotiator” and “a great leader of a great country.”
v Xi said he was “very warm seeing you again” and was
ready to work with Trump to “build a solid foundation for China-US relations.”
He acknowledged that friction between the two major economies was normal but
urged both sides to “stay the right course” and ensure “steady sailing” for
their relationship.
v The leaders are expected to finalize a framework
deal, negotiated over the weekend in Malaysia, under which China would pause a
rare-earth licensing regime for at least a year and resume soybean purchases in
exchange for lower US tariffs. "Our two economic and trade teams reached a
basic consensus and made encouraging progress," Xi said.
v Xi also praised Trump’s efforts to resolve
conflicts in Gaza and Southeast Asia, saying both countries should “jointly
shoulder our responsibility as major powers.”
v Although Trump said the talks could last up to four
hours, the White House scheduled less than two. The meeting was expected to
ease months of tariff and export-control threats, but may fall short of a
comprehensive agreement addressing the deeper issues in US-China economic &
diplomatic ties.
v No formal joint statement was issued immediately
after the meeting, and the leaders shook hands before departing without public
comments at the venue. Trump is en route back to Washington, D.C., following
the APEC events.
Highlights
of Trump's comments abroad, Air Force One:
·
Xi Meeting a
“12/10,” Paves Way for Trade, Fentanyl, and Technology Deals
Meeting
Overview:
·
Meeting with Xi
was amazing; A lot of decisions were made
·
Will be
providing conclusions on very important things
·
On a scale of 1
to 10, the meeting with Xi was 12
Soybean and
Agricultural Trade:
·
Purchases of
soybeans will start immediately
Fentanyl
and Tariffs:
·
Agreed that Xi
will work very hard to stop fentanyl
·
Will cut
fentanyl tariff on China to 10% from 20%
·
Tariffs on China
will be 47% down from 57% (Trump 1.0+2.0);
·
Under Trump 2.0,
tariffs on China were reduced from 30% to 20%
Rare
Earths:
·
All the rare
earth issues have been settled
·
No more
roadblocks on rare earths
·
It’s a one-year
agreement that will be extended
U.S.
official travelling with Trump:
·
China will keep
exports of rare earths flowing
Chips and
Technology:
·
We did discuss
chips; they will be talking to NVIDIA and others about taking chips
·
We’re not
talking about Blackwell chips
·
I wouldn’t say
everything was discussed
Nuclear and Security:
·
With others
(Russia) doing nuclear testing, we need to do so also
·
Nuclear test
sites will be determined later
·
I’d like to see
denuclearization
·
We’re actually
talking to Russia about denuclearization
International
Relations:
·
China and the US
are going to collaborate on Ukraine
·
I’ll be going to
China in April
·
Xi will be
coming to the U.S. sometime after that
·
I would come
back to talk with Kim
·
Taiwan not
discussed in talks with Xi
Trump Says
Didn’t Talk Nvidia Blackwell Chips for China with Xi
US President Trump said he discussed the sale of
Nvidia Corp. chips to China with Chinese President Xi Jinping, emphasizing that
further negotiations with the $5 trillion company will depend on Beijing.
However, Trump clarified that the discussions on Thursday did not cover
Nvidia’s latest Blackwell AI accelerators. “We’re not talking about the
Blackwell,” he told reporters aboard Air Force One.
On Wednesday, Trump had indicated he would address
Blackwell shipments with Xi, fueling speculation that the US might allow the
export of more advanced AI chips to China. Such a move would have been a major
gain for Nvidia, the world’s largest company by market value, a significant
concession to Beijing, and a potential shift in Washington’s long-term strategy
to limit China’s AI capabilities.
Trump Says
China Pledges to Buy ‘Tremendous’ Amounts of Soybeans
US President Donald Trump said China has committed
to buying "tremendous" amounts of American soybeans after he met with
Chinese President Xi Jinping in South Korea. Trump added that Beijing will
begin purchases immediately, though he did not specify volumes. Following the
announcement, Chicago soybean futures fell as much as 2%. US soybean exports to
China totaled over $12 billion last year. The slowdown in Chinese buying has negatively
impacted American farmers and provided Beijing with leverage in trade
negotiations. Ahead of the summit, China had signaled goodwill by making its
first US purchases of the season.
Trump Seals
Rare Earth Agreement, Cuts China Fentanyl Tariffs from 57% to 47%
U.S. President Donald Trump said he reached a
one-year agreement with China on rare earths and critical minerals and cut
fentanyl tariffs on Beijing by half following his meeting with Chinese
President Xi Jinping in South Korea. Speaking aboard Air Force One, Trump
called the meeting “amazing” and said “a lot of decisions were made.” He
confirmed the rare earths issue is settled under a one-year agreement to be
renegotiated annually. Tariffs on Chinese exports will drop to 47% from 57%.
In return, China will work to curb fentanyl and
resume purchases of U.S. soybeans and other agricultural products. Trump said
he will visit China in April, followed by a trip by Xi to the U.S., though no
timeline was specified. The meeting, the first in six years, lasted one hour
and 40 minutes. Beforehand, both leaders struck a conciliatory tone: Trump
called Xi “an old friend” and Xi assured that China’s growth ambitions would
not conflict with Trump’s “Make America Great Again” agenda.
Trump Calls
Xi Talks “Amazing,” Announces Major Trade Concessions
US President Donald Trump described his meeting
with Chinese President Xi Jinping as "amazing" and said it produced a
trade deal that immediately halved US fentanyl-related tariffs on Chinese
goods. The agreement also includes China resuming soybean purchases and pausing
its rare-earth licensing regime for at least a year. "On a scale from zero
to 10, I would say the meeting was at a 12," Trump told reporters aboard
Air Force One.
Trump indicated the leaders largely formalized a
framework negotiated over the weekend in Malaysia, though China has not yet
released details. Speculation that Trump might grant further concessions, such
as allowing access to Nvidia’s Blackwell chips or changing policy on Taiwan,
proved unfounded. The discussions did cover some other Nvidia products.
The tariff rollback gives Beijing a competitive
advantage, lowering costs compared with rivals facing smaller levies. Trump
said he will visit China in April, with Xi coming to the US next year. The
leaders also agreed to cooperate on Ukraine and remove shipping tariffs and
fees. “We have — it was an outstanding group of decisions, I think, that was
made,” Trump said.
President
Trump’s Press Gaggle aboard Air Force One: October 30, 2025 – En route from
Busan, South Korea to Washington, D.C.
Overall
Assessment of the Meeting
·
I thought it was
an amazing meeting.
·
President Xi is
a great leader of a very powerful, very strong country —
·
China. It was an
outstanding group of decisions.
·
We concluded
many very important points.
·
We agree on so
many elements.
·
On a scale of 0
to 10, I’d give it a 12.”
Agricultural
Purchases
·
Large amounts —
tremendous amounts — of soybeans and other farm products are going to be
purchased immediately.
·
President Xi authorized
China yesterday to start buying in very large quantities. That was a very nice
gesture.
Fentanyl
& Tariff Reduction
·
On fentanyl, we
agreed he’s going to work very hard to stop the flow — especially the
precursors.
·
I had put a 20%
tariff on China because of fentanyl. Based on his statements today, I reduced
it by 10% — so now it’s 10%, effective immediately.
·
They’ve already
taken action. President Xi was very strong: they will enforce laws internally,
take strong measures against violators.
Overall
Tariff Level
·
Tariffs were
about 57%, now down to 47% because of the fentanyl reduction.
·
Other Section
301 and 232 tariffs remain — some up to 100% on individual products — but the
general rate is ~45–47%.”
Semiconductors
(Chips)
·
We did discuss
chips. They’re going to be talking to Nvidia and others about taking chips. We
make great chips — Nvidia is the leader.
·
I’ll speak to
Jensen [Huang]. It’s between them and Nvidia, but we’re the referee.—
·
Not the
Blackwell — that just came out yesterday. But a lot of other chips, and that’s
good for us.
USTR: “We already
sent a lot of advanced chips. Focus was on rare earth export controls — China
will keep those flowing.”
Rare Earth
Minerals
·
All of the rare
earths have been settled
·
Worldwide. That
roadblock is gone.
·
China will not
impose the controls they proposed. It’s a one-year agreement that we’ll
routinely extend.
Trade Deal
Timeline & Structure
·
We have a deal
now. Every year we’ll renegotiate, but it will go on long beyond the year. Not
too many major stumbling blocks left. We’ll sign pretty soon.
Future
Visits
·
I’ll be going to
China in April 2026. He’ll come here afterward — maybe Florida (Palm Beach) or
Washington, D.C
Shipping
Fees (Section 301 Investigation)
·
We’re postponing
the shipping fee investigation while we negotiate.
·
The Koreans just
agreed to $150 billion in U.S. shipbuilding. We have a good path forward — it’s
no longer an issue.
Ukraine
& Russian oil
·
Ukraine came up
very strongly. We’re both going to work together to see if we can get something
done.
·
The sides are
locked in. Sometimes you have to let them fight — it’s crazy. But he's going to
help us.
·
We didn't
discuss oil (China buys from Russia), but we'll try to end the war. I don't
like seeing 6–8,000 young people killed
Taiwan
·
Never came up.
Not discussed.
Nuclear
Testing
·
Others are
testing. We have more nuclear weapons than anybody, but haven't tested in
years. If they test, we should test too. Details will be announced.
·
Ideally, we’d
get denuclearization — we’re talking to Russia; China would be added.”
Israel–Gaza
·
Israel had a
soldier killed by a sniper — they did retribution. It’s still a ceasefire —
back on track.
North Korea
(Kim Jong-un)
·
We didn't talk
to Kim. I was too busy — it would've been disrespectful to this meeting. I'll
come back to it. I had a great relationship with him.
Broader
Asia Trip Success
·
Hundreds of
billions — trillions in investments:
·
South Korea:
massive deals
·
Japan: Toyota
$10B+ plants
·
Malaysia, Cambodia–Thailand peace deal,
critical minerals
·
China
congratulated me — no new investment commitments, but they feel very strongly
about our success, and China already has huge investments in the US
Canada
·
Not a very nice
conversation last night
China
confirmed:
·
China Suspends
Export Controls, Moves to Strengthen Fentanyl and Soybean Trade with US
·
Pause on
Countermeasures: China will pause countermeasures related to the US Section 301
investigation for one year.
·
Fentanyl Tariff:
The US will remove the 10% “fentanyl tariff” on goods from China’s mainland,
Hong Kong, and Macau.
·
TikTok Issues:
China will properly handle TikTok-related matters with the US.
·
Fentanyl and
Agriculture Cooperation: Both sides reached a consensus to cooperate on
fentanyl and expand agricultural trade.
·
Export Controls:
China will pause the October 9 export control measures for one year.
·
Tariff
Exemptions: Agreed to continue extending certain tariff exemption measures.
·
Adjustment of
Countermeasures: China will adjust some existing countermeasures.
Trump’s
comments in Truths:
I had a truly great meeting with President Xi of
China. There is enormous respect between our two Countries, and that will only
be enhanced with what just took place. We agreed on many things, with others,
even of high importance, being very close to being resolved. I was extremely
honored by the fact that President Xi authorized China to begin the purchase of
massive amounts of Soybeans, Sorghum, and other Farm products. Our Farmers will
be very happy! In fact, as I said once before during my first Administration,
Farmers should immediately go out and buy more land and larger tractors. I
would like to thank President Xi for this!
Additionally, China has agreed to continue the flow
of Rare Earth, Critical Minerals, Magnets, etc., openly and freely. Very
significantly,
China has strongly stated that it will work
diligently with us to stop the flow of Fentanyl into our Country. They will
help us end the Fentanyl Crisis.
China also agreed that it will begin the process of
purchasing American Energy. In fact, a very large scale transaction may take
place concerning the purchase of Oil and Gas from the Great State of Alaska.
Chris Wright, Doug Burgum, and our respective Energy teams will be meeting to
see if such an Energy Deal can be worked out.
The agreements reached today will deliver
Prosperity and Security to millions of Americans. After this Historic trip to
Asia, I am now heading back to Washington, D.C. I want to thank the Great
Countries of Malaysia, Japan, and South Korea for being so generous, gracious,
and hospitable. Also, Australia, Canada, New Zealand, Singapore, Thailand, and
Vietnam, which were at the Dinner last night hosted by His Excellency Lee Jae
Myung. Hundreds of Billions of Dollars are being brought into our Country
because of them. Our Nation is Strong, Respected, and Admired Again, and THE
BEST IS YET TO COME!
Worked really hard, 24/7, took in Trillions of
Dollars, and Chuck Schumer said the trip was "a total dud," even
though he knows it was a spectacular success. Words like that are almost
treasonous!!!
Highlights
of comments made by China’s President XI (as per state media Xinhua)
·
BOTH SIDES HAVE
GOOD PROSPECTS FOR COOPERATION IN AI
·
BOTH SIDES HAVE
GOOD PROSPECTS FOR COOPERATION IN THE FIELDS OF COMBATING ILLEGAL IMMIGRATION
·
BOTH SIDES HAVE
GOOD PROSPECTS FOR COUNTERING TELECOM FRAUD, MONEY LAUNDERING
·
TWO SIDES SHOULD
REFINE, FOLLOW UP ON CONSENSUS
·
TWO SIDES SHOULD
LENGTHEN THE LIST OF COOPERATION
·
ECONOMIC, TRADE
TEAMS OF CHINA AND U.S. HELD IN-DEPTH TALKS AND REACHED CONSENSUS ON SOLUTIONS
TO PROBLEMS
·
TWO SIDES SHOULD
NOT FALL INTO 'VICIOUS CYCLE OF REVENGE'
·
TWO SIDES SHOULD
LOOK AT THE LONG-TERM INTEREST OF COOPERATION
·
TRADE RELATIONS
SHOULD BE A BALLAST STONE FOR RELATIONS
·
TRADE AND
ECONOMY SHOULD BECOME A PROPELLER FOR CHINA-US RELATIONS
·
TEAMS ON BOTH
SIDES SHOULD FOLLOW UP
·
CHINA, US SHOULD
HAVE POSITIVE IN REGIONAL, INTERNATIONAL STAGE
·
CONVERSATION IS
BETTER THAN CONFRONTATION
·
CHINA NEVER
SEESKS TO CHALLENGE OR REPLACE ANY COUNTRY, FOCUSES ON DOING ITS OWN BUSINESS
WELL
·
CHINA'S ECONOMY
IS LIKE AN OCEAN
·
CHINA IS
CONFIDENT, CAPABLE OF DEALING WITH ALL KINDS OF RISKS, CHALLENGES
Xi
Jinping's Comments on Meeting with Trump, as Reported by Xinhua
Following the October 30, 2025, bilateral meeting
between Chinese President Xi Jinping and U.S. President Donald Trump in Busan,
South Korea, Xinhua—the official state news agency of China—published detailed
coverage of Xi's remarks. The meeting, held on the sidelines of the APEC
summit, focused on trade tensions, tariffs, fentanyl precursors, and broader
bilateral relations. Xinhua's reporting emphasized a positive and cooperative
tone from Xi, framing the discussion as a step toward stabilizing ties between
the world's two largest economies.
On Trade
Consensus and Economic Cooperation
Xi stated
that "trade negotiators from the world’s two largest economies had reached
a basic consensus on a deal," highlighting progress on addressing mutual
concerns such as tariffs and supply chains. He noted this as a foundation for
"practical cooperation" moving forward.
On
Alignment with U.S. Priorities
Addressing Trump's "Make America Great
Again" (MAGA) vision, Xi remarked that "China’s development does not
contradict Mr. Trump’s vision of ‘Making America Great Again’." This was
positioned as evidence of complementary interests, with Xi suggesting that both
nations' growth could mutually benefit.
On Guiding
Bilateral Relations
Xi emphasized leadership's role in the
relationship, saying that "the two leaders should guide the direction of
ties." He described the U.S. and China as "partners and
friends," underscoring the need for high-level dialogue to navigate
challenges.
On the
Personal and Long-Term Relationship
In a translated remark during the meeting, Xi
expressed optimism about their dynamic, stating that "we will have a
fantastic relationship for a long time." This echoed Trump's post-meeting
praise, with Xinhua portraying the interaction as warm and productive.
U.S.
Treasury Secretary Scott Bessent's Fox Business Comments on Trump-Xi Meeting
Outcomes
U.S. Treasury Secretary Scott Bessent appeared on
Fox Business Network's "Mornings with Maria" on October 30, 2025,
hours after President Donald Trump's bilateral meeting with Chinese President
Xi Jinping in Busan, South Korea. In a wide-ranging discussion, Bessent
detailed the immediate economic wins from the summit, framing it as a
"substantial de-escalation" in U.S.-China tensions. He emphasized the
talks' focus on "bigger picture ideas," including broader economic
and strategic issues, conducted with "great respect" between the
leaders.
On Soybean
Purchases and Agricultural Trade
Bessent highlighted China's commitment to resume
large-scale U.S. agricultural imports as a cornerstone of the agreement.
"China has agreed to purchase 12 million metric tons of soybeans from the
United States this year—between now and January—and at least 25 million metric
tons in each of the next three years," he stated. This volume aligns with
pre-trade war levels (25-30 million tons annually) and addresses a 50% drop in
purchases during the first seven months of 2025. He credited the deal with
stabilizing markets for American farmers, noting pre-summit goodwill gestures
like China's initial seasonal buys. "This is a direct win for our
agricultural sector," Bessent added, tying it to the one-year trade
framework negotiated in Malaysia.
On Tariff
Reductions and Fentanyl Commitments
Echoing Trump's Air Force One comments, Bessent
confirmed the fentanyl-related tariff cut from 20% to 10% on Chinese imports,
effective immediately, as part of reciprocal concessions. He described Xi's
pledge for stricter controls on precursor chemicals as "enforceable and
actionable," building on prior successes in scheduling fentanyl itself.
Overall, U.S. tariffs on China would drop from 57% to 47%, with exemptions
potentially lowering the effective rate further. Bessent stressed this as
evidence of "practical cooperation," avoiding the threatened 100%
hike while maintaining leverage on core issues.
On Rare
Earths and Export Controls
A pivotal outcome, per Bessent, was the mutual
one-year moratorium on escalatory measures. China will pause its October 9
restrictions on rare earth mineral exports—critical for U.S. tech and
defense—ensuring uninterrupted supply. In exchange, the U.S. will suspend
expansion of entity list restrictions on Chinese firms' access to American
technology. "This came after Trump and Xi discussed big picture issues
with great respect," Bessent noted, underscoring the global supply chain
benefits. He anticipated routine annual
extensions but cautioned that Beijing may require end-use certifications to
prevent military diversion.
On
Technology, TikTok, and Broader Investments
Semiconductors
were addressed but without breakthroughs; discussions centered on non-advanced
chips, with Nvidia poised for direct talks under U.S. oversight. On TikTok, Bessent revealed a Malaysia-brokered
deal allowing continued U.S. operations, averting a ban while addressing data
security concerns—no full divestiture from ByteDance was required. He projected
the Asia trip, capped by the Xi summit, could yield up to $2 trillion in new
U.S. investments, including South Korea's $150 billion shipbuilding pledge and
Toyota's $10 billion plants. "Hundreds of billions are already flowing in,"
he said, dismissing domestic critics like Senate Minority Leader Chuck Schumer.
On
Strategic and Geopolitical Dimensions
Bessent
portrayed the meeting as a "tactical pause" in the trade war, not a
resolution of structural rivalries.
Ukraine's collaboration was noted, with potential joint mediation efforts,
while Taiwan's omission signaled de-risking. On nuclear energy, he pledged an
"all hands on deck" push for the U.S. to "catch up" with
China's advancements, linking it to energy security. He credited Trump's
personal rapport with Xi for the progress, adding, "Nothing was agreed until today, but the framework is solid."
Overall, Bessent's
tone was optimistic yet pragmatic, aligning with the administration's "America First" narrative. Highlights of Bessent’s comments:
·
Trump and
China's Xi were able to discuss big-picture issues
·
Trump agreed to
cut the fentanyl tariff on China in half
·
The US will
suspend entity list restrictions for US technology exports for one year
·
The US Section
301 measures on China have also been suspended
·
Japan will be
weakening off Russian LNG
·
China deal
signatures will be possible next week
·
China agreed to
buy 12 million metric tons of US soybeans this year
·
The US shutdown
is starting to eat into the American economy
·
I imagine we
would have fed the chair candidate by Christmas.
·
I applaud the 25
bps Fed cut, but don't like the language.
·
I'm very
optimistic about 2026 growth and inflation levels
·
Job growth will
rebound very strongly
Meanwhile,
China has officially released the results of trade negotiations with the US in
Kuala Lumpur. According to the Ministry of Commerce of the PRC, the parties
agreed on the following:
·
The US will
cancel the 10% "fentanyl tariff" and suspend the 24% tariffs imposed
on Chinese goods (including goods from the Hong Kong and Macau Special
Administrative Regions) for one year.
·
In response,
China will adjust countermeasures against the aforementioned US tariffs. At the
same time, the parties agreed to continue measures to extend certain tariff
exemptions.
·
The US will
suspend for one year the export restrictions announced on September 29, which
apply to any subsidiaries of Chinese enterprises included in the sanctions
list.
·
China will
suspend for one year the implementation of export control measures announced on
October 9.
·
The American
side will suspend for one year the implementation of measures against China's
maritime, logistics, and shipbuilding industries.
·
In response,
China will suspend the implementation of its countermeasures against the
American side for one year after the US decision comes into effect.
·
The parties will
follow the results of the trade and economic negotiations in Madrid, with the
American side taking on "positive commitments" in the field of
investment, and China agreeing to properly resolve issues related to TikTok
together with the US.
·
The parties are
ready to cooperate in combating fentanyl-related drugs, expand trade in
agricultural products, and resolve specific situations concerning individual companies.
Conclusions
Under Trump 2.0, as part of the last trade
agreement, US tariffs on Chinese goods were 30% (10% basic + 20% Fentanyl); now
it has been further reduced to 20% (10% basic+10% Fentanyl). If we consider
various exemptions, like on electronic items, the effective (weighted average
rate) would be lower. Further, Trump may withdraw the remaining 10% Fentanyl
tariffs on China in his April'26 visit to China or Xi's subsequent visit to the
US.
At present, China buys non-US-origin Chips of US
MNCs (NVIDIA chips made in Taiwan or South Korea); it does not buy any
US-origin chips due to Trump's tech war narrative. And above all, China is now
almost self-reliant on AI Chips. Trump may not withdraw AI Chip export
restrictions to China, and China may not fully withdraw its REMs export
restrictions to the US. China may not provide blanket export permissions of
REMs to the US and may permit only US civilian usage exclusively after getting
an undertaking that these REMs will not be used in military hardware directly
or indirectly, in line with its global policy.
The US-China trade & tech war may not be over
yet, as there were no formal agreements on vital issues like REMs and AI Chips
export restrictions. But overall, there is significant progress, although the sky
is not yet clear. The market was already discounted for such an outcome, and
thus the overall reaction was muted. Trump's body language on Air Force One
shows that he may not be fully satisfied yet, but a final US-China trade deal
2.0 may be signed by mid-2026 or late 2026 after the November'26 US mid-term
election.
Bottom
line:
Overall, the US-China trade truce and Trump-Xi
meeting outcome were less dovish than expected. Although the Fed cut rates by
25 bps as highly expected on October 29, Chair Powell poured cold water on
another rate cut in Decmeber'25. Thus, Wall Street Futures slid.
The S&P 500 and the Nasdaq slipped on Thursday,
weighed down by losses in technology and communication services, while the Dow
Jones wobbled. Meta tumbled more than after recording a $15.93 billion one-time
tax-related charge, while investors also grew cautious about the company’s
rising capital expenditures (CAPEX) related to AI development. Microsoft slid
after disclosing that its OpenAI investment reduced quarterly earnings by $3.1
billion. In contrast, financials and real estate were among the top-performing
sectors. Alphabet surged after reporting stronger-than-expected earnings, and
Eli Lilly gained following an upgrade to its full-year revenue guidance.
JPMorgan, Visa, and Goldman Sachs also posted solid gains amid a less dovish
Fed cut and yield curve steepening.
Technical
outlook: DJ-30, NQ-100, SPX-500 and Gold
Looking
ahead, whatever may be the narrative, technically Dow Future (CMP: 47700) now has to sustain over 48000 for a
further rally to 48300* and 48600/49000-49700/50000 in the coming days;
otherwise sustaining below 47900-47700, DJ-30 may fall to 47200/47000-46500/46200
and further 45500/44950-44500/44200 and 43500 in the coming days.
Similarly,
NQ-100 Future (25800) now has
to sustain over 26100 for a further rally to 26200-26500 in the coming days;
otherwise, sustaining below 25750, NQ-100 may fall to
25300/25000-24700/24500-24300/24300 and 23700/23400/23000 and 22600/22400 in
the coming days.
Looking at
the chart, technically SPX-500
(CMP: 6880) now has to sustain over 7050-7100 for a further rally to
7200/7300-7500/8300 in the coming days; otherwise, sustaining below 7025/6900-6800/6750,
may fall to 6650/6595 and 6490/6450-6375/6300-6250/6200 and further fall to
6080 in the coming days.
Looking at
the chart, Technically Gold (CMP:
$4025) has to sustain over 4060-4125 for a further recovery to 4395-4405 for
4425/4455-4475/4500 to 4555-4575 and even 5000 zone in the coming days;
otherwise sustaining below 4050-3875, Gold may again fall to 3770 and
3700/3600-3500/3450 and 3350 levels in the coming weeks.
