Wall Street Rallies as Optimism Builds Around the Trade Outlook

US stock futures gained ground in early Asian trading as optimism grew around a potential breakthrough in trade negotiations between Washington and Beijing. The upbeat tone followed signals from both sides that they were close to finalizing a comprehensive trade agreement, coinciding with President Donald Trump’s diplomatic tour across the region.

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S&P 500 futures advanced 0.7%, while equity contracts in Japan, Australia, and Hong Kong also pointed higher. On Friday, the U.S. benchmark index climbed 0.8%, and the tech-heavy Nasdaq 100 added 1%, both marking fresh closing records. Global equities tracked by the MSCI World Index also hit new highs, while oil prices edged up alongside the risk-on sentiment.

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In the currency market, the Australian and New Zealand dollars strengthened modestly in Monday’s early session, while the U.S. dollar showed a mixed performance against major peers. The moves suggested investors were ready to embrace a more positive tone as trade relations between the world’s two largest economies appeared to be turning a corner.

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Trade negotiators from both sides wrapped up two days of discussions in Malaysia on Sunday, and officials said progress had been made on several key sticking points. A Chinese representative noted that both countries reached an initial understanding on topics such as export controls, fentanyl regulation, and shipping fees issues that have long strained relations between the two powers.

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“This looks like more of a de-escalation than a true turning point,” commented Sean Keane, chief Asia-Pacific strategist at JB Drax Honore in Singapore. He noted that removing the threat of new U.S. tariffs scheduled for November 1 “simply avoids an escalation that few in the market ever really expected to materialize.”

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Looking ahead, investors will turn their attention to a critical week packed with central bank decisions. The Federal Reserve, European Central Bank, and Bank of Japan are all scheduled to announce policy updates. Markets widely expect the Fed to deliver a 25-basis-point rate cut, while both the ECB and BOJ are anticipated to keep their policy settings unchanged.

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“The upcoming week will be pivotal for market sentiment,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “We have a convergence of major events from central bank policy signals to the U.S. corporate earnings season which could inject significant volatility into global markets. Investors will need to balance optimism around trade progress with the potential impact of shifting monetary policy.”

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Market Snapshot

Equities

• Hang Seng futures gained 0.4% as of 7:08 a.m. Tokyo time
• S&P/ASX 200 futures advanced 0.3%
• Nikkei 225 futures rose 0.5%
• S&P 500 futures increased 0.7%

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Currencies

• The Australian dollar strengthened 0.4% to $0.6535
• The Japanese yen traded steady at 152.99 per dollar
• The offshore yuan rose 0.1% to 7.1168 per dollar

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Cryptocurrencies

• Bitcoin climbed 1.3% to $114,769.20
• Ether gained 1.9% to $4,138.23

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Bonds

• Australia’s 10-year government yield rose five basis points to 4.19%

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Investor sentiment also received an extra boost from softer U.S. inflation data earlier in the day, which reinforced the case for additional rate cuts this year and into 2026. “Markets are charging ahead after this morning’s lighter-than-expected CPI report strengthened the outlook for a series of Fed rate reductions,” said Jose Torres, senior economist at Interactive Brokers.

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Meanwhile, the White House warned that the ongoing government shutdown could delay the release of October’s inflation data. Despite the uncertainty, markets continued their upward trajectory, with the S&P 500 briefly breaking above the 6,800 level and closing the session just shy of that milestone.

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In the bond market, U.S. Treasury two-year yields slipped by one basis point to 3.48%, signaling continued investor demand for safer assets even as equities rallied. The dollar, meanwhile, fluctuated throughout the session but ended largely unchanged.

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The latest developments underscore how a mix of improving trade relations, dovish central bank expectations, and resilient corporate earnings are supporting global risk appetite. While investors remain cautious about the durability of the U.S.-China accord, the easing of tariff concerns could extend the equity rally into year-end.

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For now, the market narrative is shifting from tension to tentative optimism. With inflation cooling, monetary policy easing, and trade barriers softening, investors appear ready to embrace risk again though most agree that volatility will remain a constant companion as the year draws to a close.

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