Closing Recap

U.S. stocks extended their rally, with the S&P 500 hitting its highest level since late February, driven by optimistic comments on U.S.-China trade talks; gold and oil slipped, the dollar firmed slightly, and Treasury yields were little changed after a solid auction. 

Key Takeaways 

• Rally Continues on Trade Hopes: Major indices posted another day of gains (S&P 500 up 8 straight), fueled by Commerce Secretary Lutnick’s positive commentary on U.S.-China trade negotiations. 
• S&P 500 at 2.5 Month Highs: The benchmark index reached its best levels since late February. 
• Focus on Export Controls: Trade talks centered on resolving issues around export controls, with potential easing of U.S. semi restrictions and China releasing rare earths. 
• Iran Nuclear Talk Jitters: A brief midday dip occurred after President Trump commented on Iran becoming “more aggressive” in nuclear talks, but markets quickly recovered. 
• Gold & Oil Ease: Gold prices pulled back slightly, and crude oil snapped its 3-day win streak. 
• Dollar Firms, Yields Stable: The U.S. dollar edged higher, while Treasury yields were little changed after a decent 3-year note auction. 
• World Bank Cuts Growth Forecast: The World Bank lowered its 2025 global growth forecast, citing tariffs and uncertainty as headwinds. 

Market Overview 

U.S. equity markets continued their upward march today, with the S&P 500 notching an intraday high for the eighth consecutive session and closing at its best level since late February. The sustained rally was primarily driven by encouraging commentary from U.S. Commerce Secretary Howard Lutnick, who stated that ongoing trade talks between the U.S. and China in London were “going well.” He indicated that the teams were aiming to conclude discussions this evening but could extend into tomorrow if necessary, with export controls being a key agenda item. This followed remarks from National Economic Council Director Kevin Hassett, suggesting a potential deal could involve China releasing rare earths for export and Washington easing China’s access to semiconductors. 

Index	Up/Down	% Change	Last
DJ Industrials	105.11	0.0025	42866
S&P 500	32.93	0.0055	6038
Nasdaq	123.75	0.0063	19714
Russell 2000	11.96	0.0056	2156

This stream of positive trade news kept investor sentiment buoyant, allowing markets to shrug off a brief midday dip triggered by President Trump’s comments that Iran was becoming “much more aggressive” in nuclear talks. The “buy the dip” mentality remains firmly in place. Market breadth was positive, with ten of the eleven S&P sectors finishing in the green. Energy, Communications, Consumer Discretionary, and Healthcare were among the top performers, while Industrials was the only sector to end lower. 

Despite the equity market optimism, the World Bank issued a cautionary note, slashing its global growth forecast for 2025 due to the “significant headwind” posed by higher tariffs and heightened uncertainty. Investors are now looking ahead to tomorrow’s crucial U.S. CPI inflation report for further market direction.

Economic Calendar

No major U.S. economic data releases were scheduled for yesterday. The focus remains on trade negotiations and upcoming inflation data. Key data for today and this week: 

• U.S. CPI inflation report 
• World Bank Global Growth Forecast (2025): Cut by 0.4% to 2.3%. 
• Global trade growth forecast for 2025 cut to 1.8% (from 3.4% in 2024). 

Commodities, Currencies, and Treasuries

Gold prices slipped, with August futures settling down $11.50 (-0.34%) at $3,343.40 per ounce, as positive trade news and a slightly firmer U.S. dollar reduced safe-haven appeal. Crude oil futures also edged lower, snapping a three-day winning streak. WTI settled down $0.31 (-0.47%) at $64.98/bbl. While initial optimism from U.S.-China trade talks provided support, prices eased later in the session as the market awaited more concrete outcomes. The U.S. dollar index (DXY) firmed slightly, rising about +0.15% to above 99.10, finding some support after recent declines. Treasury yields were little changed to slightly lower across the curve after a steady 3-year Treasury note auction. The 10-year yield ended near 4.47%. Upcoming 10-year and 30-year auctions this week will provide further tests of demand.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.31	USD/bbl	64.98
Brent	-0.17	USD/bbl	66.87
Gold	-11.5	USD/oz	3343.4
EUR/USD	0.0001	USD	1.1421
USD/JPY	0.38	JPY	144.96
10-Year Note	-0.006	%	0.0447

Looking Ahead 

All eyes will be on tomorrow morning’s U.S. Consumer Price Index (CPI) inflation report for April, which will be a critical data point for assessing price pressures and potentially influencing Federal Reserve policy expectations. Developments from the ongoing U.S.-China trade talks in London will also remain a primary market driver. The Treasury’s 10-year note auction tomorrow and 30-year bond auction on Thursday will provide further insights into investor demand for U.S. debt amidst the current trade and economic backdrop.