Trump and Xi Talk - Markets Wait

President Trump’s visit to Beijing turned into a business‑focused summit rather than a traditional diplomatic dialogue. Accompanied by roughly 30 American CEOs, the delegation emphasized trade and technology issues while delivering only warm rhetoric and no concrete agreements. Observers noted the contrast with earlier U.S.–China encounters, where the president arrived with a stronger foreign‑policy team. The two‑hour joint press conference highlighted topics such as Iran, Taiwan and tech cooperation, but left markets waiting for actionable policy signals. Analysts view the meeting as a signaling exercise aimed at shaping future economic negotiations.

The latest US producer‑price data shocked markets, rising 1.4 % month‑over‑month—the steepest increase in four years—and pushing the annual PPI rate to 6 %. The surge, driven by higher oil and gas costs, is spilling into core goods and grocery prices, tightening household budgets. Bond markets reacted sharply: two‑year yields breached 4 % and the 30‑year Treasury sold above 5 % for the first time since 2007, raising concerns about debt servicing. With 30‑year mortgage rates hovering near 6 %, the Federal Reserve’s new chair, Kevin Walsh, faces pressure as futures price an 80 % chance of a rate hike by early next year.

Despite inflation worries, equity markets remain buoyed by the AI narrative and robust Asian chip demand. Taiwan’s TSMC lifted its 2030 chip‑demand forecast to $1.5 trillion, while South Korea’s SK Hynix edges toward a second trillion‑dollar market cap, a milestone outside the United States. Nvidia’s upcoming earnings are expected to reinforce the tech rally, and investors are betting that AI‑driven revenue growth will offset tighter monetary conditions. The convergence of high‑tech optimism and rising bond yields creates a nuanced risk‑reward landscape for global portfolios.