Market snapshot: stocks get ‘Trump bump’ on back of China talks

Stocks saw the benefit of a ‘Trump bump’ as the US president revealed positive tariff talks with China, sending the S&P 500 and Nasdaq to new record highs.

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The talks also involved the deadline for a sale of TikTok, the Chinese-owned company with the US president implying that a deal had been reached. Even so, all is not all plain sailing in the usually fractious relationship, with the Chinese regulator separately claiming that NVIDIA Corp (NASDAQ:NVDA) had violated the country’s anti-monopoly law, sending the shares fractionally lower against the tide of other “Magnificent Seven” gains.

Elsewhere, Tesla Inc (NASDAQ:TSLA) shares gained after it was announced that CEO Elon Musk had bought stock to the tune of some $1 billion (£733 million) in a sign of confidence in the company’s prospects. The shares have been under some pressure as EV competition has intensified and as Musk’s previous political involvement resulted in falling sales, but the price is nonetheless ahead by 82% over the last year as Tesla shifts some of its focus towards robotics.

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As the two-day Federal Reserve meeting opens later, there is also an important retail sales release which will give further colour on the consumer’s activity and confidence or otherwise in the outlook. The Fed’s focus appears to have shelved inflation concerns for now, instead concentrating on a stalling jobs market which should lead to a 0.25% cut being announced tomorrow.

In the meantime, the record closing highs for the S&P 500 and Nasdaq take gains in the year so far to 12.5% and 15.7% respectively, while the Dow Jones has added 7.8% and remains close to its own record reached last week.

Another central bank in focus this week is the Bank of England, whose concerns are the opposite from the Fed in that inflation is hampering its ability to loosen monetary policy, despite its own obviously weakening labour market. The release of the latest unemployment figures will do little to change the dial, with overall earnings up by 4.8% and remaining inflationary, while the jobless rate held steady at 4.7%, all but ensuring a no-change rate decision from the central bank later in the week.

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Geopolitical concerns remain a priority for investors in airline shares, alongside a trend which has seen consumers delaying booking flights until the last moment, impacting on the visibility of earnings. easyJet (LSE:EZJ) became the latest casualty in focus after a broker downgrade weighed on the shares, bringing the loss in the year so far to more than 17%, with larger and more diversified rival International Consolidated Airlines Group SA (LSE:IAG) remaining the pick of the bunch and enjoying a 28% boost over the same period.

More broadly, the premier index wilted in the absence of much buying interest, with investors still in search of a positive catalyst which could recapture the record level achieved last month. The FTSE 100 nonetheless remains ahead by 13.3% so far this year, with the FTSE 250 inching up to a cumulative gain of 5% following the unemployment data which at best has shown no further signs of deterioration for the time being at least.