Wall Street Scales Fresh Highs on Tech Earnings and U.S.–China Trade Optimism

1. Wall Street Scales Fresh Highs on Tech Earnings and U.S.–China Trade Optimis

Wall Street surged to record highs on Monday as optimism surrounding U.S.–China trade negotiations and a series of strong tech earnings lifted investor confidence. The Dow Jones, S&P 500, and Nasdaq Composite all closed at fresh all-time highs, marking the second consecutive session of strong gains across the major indexes.

The rally was driven by hopes that Washington and Beijing are moving closer to a trade framework that could pause tariffs and ease restrictions on rare-earth exports. Investors welcomed reports that U.S. President Donald Trump and China’s President Xi Jinping are expected to meet on Thursday to discuss a potential agreement that might reduce months of trade tension. As a result, Wall Street’s volatility gauge, the VIX, dropped to its lowest level in nearly a month.

Treasury Secretary Scott Bessent reinforced market optimism over the weekend when he confirmed progress on agricultural deals and rare-earth trade discussions. His remarks followed two days of negotiations in Malaysia, where officials reportedly finalized terms for renewed Chinese purchases of American soybeans. “Investors are breathing a sigh of relief,” said Scott Wren, senior global market strategist at Wells Fargo. “Even a temporary truce could provide the momentum markets need to keep climbing.”

All eyes are now on a crucial week of corporate earnings, particularly from five members of the so-called “Magnificent Seven” tech giants — Microsoft, Apple, Alphabet, Amazon, and Meta. Their results will test the resilience of the market’s latest rally, which has been largely fueled by enthusiasm over artificial intelligence investments and capital-expenditure growth. “The market expects confirmation that AI investments are paying off in revenue and profit,” Wren added.

By the closing bell, the Dow Jones Industrial Average had climbed 337.47 points (0.71%) to finish at 47,544.59, while the S&P 500 gained 83.47 points (1.23%) to close above 6,800 for the first time ever. The Nasdaq Composite surged 432.59 points (1.86%) to end the day at 23,637.46, driven by sharp gains in tech and semiconductor shares.

Within the S&P 500, communication services, technology, and consumer discretionary sectors led the advance. Alphabet jumped 3.6%, helping the communication index rise 2.3%. The technology sector also closed at a record, gaining 2%, while the Philadelphia Semiconductor Index rose 2.7%. Among individual names, Qualcomm soared 11% after unveiling two new AI chips for data centers, and Nvidia rose 2.8%, providing the S&P 500’s biggest individual boost.

Tesla also rallied 4.3% as investors grew optimistic about improved U.S.–China trade relations, although some analysts warned the move could be short-lived. “Even with the best trade deal, Tesla’s valuation remains stretched,” noted Christopher Brown, vice president of investments at Synovus.

Not all sectors joined the party. Consumer staples and materials both dipped slightly, each losing about 0.25%. Rare-earth mining companies were among the biggest losers of the day as trade optimism lowered fears of supply disruptions. Critical Metals plunged 13.7%, NioCorp Developments fell 11.5%, and Ramaco Resources slipped 2.6%.

Meanwhile, U.S.–listed Chinese companies enjoyed a rebound, with Alibaba, JD.com, PDD Holdings, and Baidu rising between 2.7% and 4.8%. The gains reflected renewed confidence in the global trade outlook and the potential for economic stability in China.

Adding to the upbeat tone, investors largely priced in a 25-basis-point interest rate cut from the Federal Reserve, expected on Wednesday. Recent cooling inflation data has strengthened expectations for policy easing, and traders will be watching Chair Jerome Powell’s comments for any hint of another cut before year-end.

Beyond the tech rally, individual corporate moves added to the day’s momentum. Keurig Dr Pepper jumped 7.6% after raising its annual sales forecast and announcing a $7 billion financing deal for its acquisition of Dutch coffee company JDE Peet’s. Lululemon gained 1.8% after revealing a new partnership with the NFL, while Janus Henderson surged 11.3% after confirming takeover interest from Trian Partners and General Catalyst.

In international markets, U.S.–listed Argentine companies soared following President Javier Milei’s election victory. YPF rose 23.8%, Banco Macro jumped 37.6%, and Grupo Financiero Galicia gained nearly 39%, signaling investor optimism in Argentina’s economic reform agenda.

Market breadth remained positive: on the NYSE, advancers outnumbered decliners by nearly two to one, while the Nasdaq recorded over 130 new 52-week highs. Trading volume reached 19.76 billion shares, only slightly below the 20-session average.

Overall, Monday’s session reflected a perfect storm of optimism — easing geopolitical tension, upcoming tech earnings, and expectations of lower interest rates. As Wall Street eyes a potential Fed cut and progress in U.S.–China relations, investors appear ready to keep the record rally alive.

Whether the momentum will hold, however, depends on one key question: can the tech giants deliver results strong enough to justify Wall Street’s sky-high expectations?