US stock market opened higher on Monday after US and Chinese officials eased tensions over the weekend, setting the stage for President Donald Trump and Chinese President Xi Jinping to potentially finalise a trade deal later this week.
In early trading, the Dow Jones Industrial Average rose 324.50 points, or 0.69%, to 47,532.06. The S&P 500 gained 63.85 points, or 0.94%, to 6,855.15, while the Nasdaq Composite advanced 341.99 points, or 1.47%, to 23,545.88.
During the ASEAN Summit in Kuala Lumpur, Treasury Secretary Scott Bessent suggested that “we have a very successful framework for the leaders to discuss on Thursday.”
The proposed framework reportedly includes delaying China’s rare earth export restrictions, which recently escalated trade tensions; cancelling Trump’s planned 100% tariffs on Chinese goods set to take effect November 1; and resuming Chinese purchases of US soybeans.
The deal may also address the TikTok dispute, with the US expected to secure an agreement for the American version of the social media app. “I have a lot of respect for President Xi, and we are going to come away with the deal,” Trump said Monday aboard Air Force One.
China’s chief trade negotiator, Li Chenggang, noted that both delegations had reached an initial agreement and would now move forward with their respective domestic approval procedures. According to Li, Washington maintained a firm stance during the negotiations, but the two sides held in-depth and productive talks aimed at finding practical solutions to their differences.
The breakthrough reduces the likelihood of a full-scale global trade war, one that had posed a significant risk to auto manufacturing in Europe and the UK.
This development follows months of escalating tension between the world’s two largest economies, which began after Trump’s “liberation day” tariff announcement at the White House in April. With the current tariff truce set to expire within days, Xi signalled he would not yield to the threat of sweeping 100% tariffs.