NEW YORK (AP) — U.S. stocks are drifting on Monday as the world’s two largest economies begin talks on trade that could help avoid a recession.
The S&P 500 was virtually unchanged in morning trading. The Dow Jones Industrial Average was down 171 points, or 0.4%, as of 10:45 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.
Officials from the United States and China are meeting in London to talk about a range of different disputes that are separating them. The hope is that they can eventually reach a deal that will lower each’s punishing level of tariffs against the other, which are currently on pause, so that the flow of everything from tiny tech gadgets to enormous machinery can continue.
Hopes that President Donald Trump will lower his tariffs after reaching such trade deals with countries around the world have been among the main reasons the S&P 500 has rallied so furiously since dropping roughly 20% from its record two months ago. It’s back within 2.3% of its all-time high, which was set in February, and it’s higher than it was before Trump shocked financial markets with his wide-ranging tariff announcement on what he called “Liberation Day.”
This may be the shortest sell-off following a shock of heightened volatility on record, according to Parag Thatte, Binky Chadha and other strategists at Deutsche Bank. Typically, stocks take around two months to bottom following a spike in volatility and then another four to five months to recover their losses. This time around, stocks have basically made a round trip in less than two months.
But nothing is assured, of course, and London’s discussion follows a prior round of talks in Switzerland. That kept trading relatively quiet on Wall Street Monday, and Treasury yields were also holding steady in the U.S. bond market as the countdown continued.
One of the market’s sharpest moves came from Warner Bros. Discovery, which rose 7.3% after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will hold onto CNN, TNT Sports and other entertainment, sports and news television brands around the world, along with some digital products.
IonQ rose 3.2% after the quantum computing and networking company said it agreed to buy Oxford Ionics for nearly $1.08 billion. All but $10 million of the purchase price will come from IonQ’s stock, and the hope is that the combined company will benefit from its complementary parts to produce computers that can perform better than classical machines.
Tesla, meanwhile, slipped. The electric vehicle company has been struggling as Elon Musk’s relationship with Trump has fallen apart, and it fell 0.4% Monday.
The frayed relationship could also end up damaging Musk’s other companies that get contracts from the U.S. government, such as SpaceX. Rocket Lab, a space company that could pick up business at SpaceX’s expense, rose 8%.
In stock markets abroad, indexes were modestly lower in Europe after rising across much of Asia.
Chinese markets climbed even though the government reported that exports slowed in May, growing 4.8% from a year earlier after jumping more than 8% in April. China also reported that consumer prices fell 0.1% in May from a year earlier, marking the fourth consecutive month of deflation.
Stocks rallied 1.6% in Hong Kong and rose 0.4% in Shanghai.
In the bond market, the yield on the 10-year Treasury was holding at 4.51%, where it was late Friday.
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AP Writer Jiang Junzhe contributed.
