Calm in Markets as U.S.-China Trade Talks Progress with Cautious Optimism

Global markets held steady amid ongoing U.S.-China trade talks, providing hope for eased tensions between the two major economies. Positive commentary from officials like U.S. Commerce Secretary Lutnick and President Trump contributed to market optimism. Despite steady conditions, concerns about tariffs and fiscal policies persist.

Global stock markets and the U.S. dollar remained stable on Tuesday as trade negotiations between the United States and China extended into their second day. Investors are hopeful for a reduction in tensions between the world's leading economies, bolstered by positive sentiments from U.S. Commerce Secretary Howard Lutnick and President Donald Trump, who framed the discussions optimistically.

Market responses reflected cautious optimism, with the Dow Jones Industrial Average gaining 0.06% to close at 42,788, the S&P 500 rising 0.16% to 6,015, and the Nasdaq Composite advancing 0.12% to 19,616. The MSCI All-Country World Index hovered near record highs, and the dollar showed minimal fluctuation against various currencies. However, Capital Economics' Jonas Goltermann cautioned against assuming an imminent rollback of tariffs, predicting enduring U.S. levies on Chinese imports.

Europe's STOXX 600 also saw a marginal rise despite setbacks for UBS shares. Meanwhile, Japan's Finance Minister disclosed potential strategies aimed at enhancing domestic ownership of government bonds. As commodities reacted to trade optimism, Brent crude rose by 0.4% to $67.30 a barrel, and gold saw a 0.5% increase to $3,344 an ounce. Analysts are watching key inflation data for further clues on economic policy trajectories.

(With inputs from agencies.)