Stocks rise on Wall Street following Trump-Xi telephone conversation
Wall Street showed some green today, as reports emerged that ol' DC Trump and Xi Jinping, former leaders of the US and China respectively, had a chat on the phone. The Dow Jones, having snapped its winning streak on June 4, started off strong but took a slight dip around the 40-minute mark.
The market's lack of buoyancy wasn't enough to dampen the spirits on Wall Street, though. The news of Trump and Xi powwow sent excitement rippling through the district. The phone call, reportedly by Xinhua, came just days after Trump accused China of breaching a trade agreement they'd just recently made. Last April, stocks had been soaring after a round of US-China trade talks in Switzerland.
As stocks crept higher after this latest development, Bitcoin hovered around the $105k mark.
JPMorgan, for one, took the call as an opportunity to announce it would now accept Bitcoin ETFs as collateral for loans. But with concerns over global economic growth still lingering, market watchers had their doubts if the gains might see major US indexes ending another winning week.
Latest to join the chorus of gloom was the ADP report on private-sector hiring growth. On Thursday, the Labor Department's Bureau of Labor Statistics revealed that the number of Americans filing for unemployment benefits had jumped by 8,000 to 247,000—the highest weekly increase since October 2024. This figure surpassed economists' expectations of 237,000 new claims.
Productivity in the US seemed to be falling as well, with the first quarter of 2025 seeing a decline in nonfarm productivity. Unit labor costs rose 6.6%, fueled in part by persistent tariff uncertainty.
Meanwhile, the European Central Bank lowered interest rates by 25 basis points, bringing its deposit facility rate to a mere 2%. This is their seventh consecutive rate cut, down from a high of 4% in mid-2023. The move follows eurozone inflation data showing a decline to 1.9% in May, below the bank's 2% target.
Trump didn't waste as much as a minute to voice his discontent over the Fed's decision. The uncertain terrain of tariffs and monetary policy continues to shape the sentiment in risk asset markets.
While the diplomatic dance between the two former leaders could potentially ease tensions and improve economic cooperation, without more details on the call's content and outcomes, it's hard to predict the precise impact on markets. The overall economic situation plays a crucial role in shaping market movements and maintaining economic stability, but the specifics of this call's influence remain unclear.
- Despite the slight dip in the Dow Jones, Bitcoin remained stable at around $105k, indicating a continued interest in cryptocurrency investing.
- JPMorgan announced it would now accept Bitcoin ETFs as collateral for loans, signaling a potential surge in crypto finance.
- The European Central Bank lowered interest rates by 25 basis points, bringing it to 2%, and this could potentially influence the Decentralized Exchange (DEX) market as well.
- With the ADP report showing an increase in unemployment claims and the overall economic situation remaining uncertain, traditional stock-market investment may continue to face challenges, while the impact of the Trump-Xi phone call on markets remains unclear.
