Stocks rallied along with copper and oil after signs that the US and China were nearing a trade deal triggered a cross-asset rally. Treasuries dropped across the curve and gold slid.
Asian shares rose 1.5% to a new intraday peak with stocks in Japan and South Korea jumping by more than 2%. Indexes in China and Hong Kong also gained at the open. Futures for the S&P 500 and the Nasdaq 100 advanced after both underlying indexes closed at a record high last week. Copper — a bellwether for global growth — surged, as did oil, with the potential US-China deal bolstering the outlook for global demand.
The Australian and New Zealand dollars, popular proxies for China exposure, edged higher, while the greenback was mixed against other major currencies. Treasuries dropped across the curve with the yield on the 10-year rising more than two basis points to 4.02%.
“This looks like a win on optics for both sides,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “Broader markets are likely to take this as a short-term risk-on cue. But the rally will need to be backed by fundamentals to sustain.”
Easing trade tensions between the world’s two largest economies are giving investors fresh impetus to extend the equity rally from April lows, when markets tumbled after President Donald Trump moved to rewrite global trade rules with new tariffs. That advance faces a key test this week, with the Federal Reserve poised to deliver its policy decision and earnings from major US technology firms offering clues on the durability of profit growth.
