Wall Street Sentiment Muted as Investors Monitor U.S.-China Talks

Published: June 9, 2025 by Omor IE

Key Points

Investors are monitoring the U.S.-China trade talks for results.
There is slight optimism, but the gains are still muted.
The NY Fed has posted that inflation expectations have gone down.
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The stock market hasn’t made any big moves in either direction today. Except for the Musk-Trump drama last week, which the market has already digested, there hasn’t been any major market-moving news. No major U.S. macro figures have come out today, so most of the focus is on the trade talks between the U.S. and China.

Both countries have restarted trade talks recently after a call finally took place with Chinese President Xi Jinping and President Donald Trump. According to a Fox News reporter, there’s no end date to the talks, and it is likely that the trade talks are still in the preliminary phase. Investors are monitoring the talks to gauge what the final tariff rate for China will be. If it is lower than expected, the market will likely react positively and vice versa.

Here’s a market update as of 12:50 PM (ET) today.

The S&P 500 is up 13.47 points, or 0.22%.
The Nasdaq Composite is up 83.7 points, or 0.43%.
The Dow Jones Industrial Average is up 35.52 points, or 0.08%.

U.S.-China Trade Talks Start

Delegations from both countries have started trade talks in London. According to The White House Economic Adviser Kevin Hassett, the talks will be short, but they will “bear results”.

These talks will build upon to Geneva Agreement last month, where both countries agreed to temporarily decrease tariffs. China lowered its tariffs to 10%, whereas the U.S. lowered its tariffs to 30%. The agreement is set to expire in August. Wall Street expects a trade deal with China within this window.

Expectations for a comprehensive deal are still low. Most think the talks will be centered around export controls and keeping communication channels open. The most optimistic scenario would be a 10% tariff on China, with fentanyl tariffs being dropped. Trump previously seemed open to it.

NY Fed Survey of Consumer Expectations

One-year inflation expectations declined by 0.4% to 3.2%.
Three-year inflation expectations declined by 0.2% to 3%.
Five-year inflation expectations declined by 0.1% to 2.6%.
One-year earnings growth expectations increased by 0.2% to 2.7%.
Mean expectations that U.S. unemployment will be higher in one year dropped 3.3% to 40.8%.
The mean perceived probability of losing one’s job in the next year decreased 0.5% to 14.8%.
The mean probability of leaving one’s job voluntarily in the next year increased 0.1% to 18.3%.