US and China open pre-summit trade talks in New York as futures rise despite the first-ever Houthi missile fired at Riyadh
Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng opened all-day ministerial talks at JPMorgan's Manhattan headquarters on Sunday, four days ahead of Thursday's White House meeting between Donald Trump and Xi Jinping — the first Chinese state visit to Washington in 11 years. US Trade Representative Jamieson Greer also attended. Three items are confirmed on the agenda: the fate of the Busan tariff truce that expires 10 November, Beijing's underdelivery on its rare-earth export commitments, and bilateral guardrails on AI; without an extension, baseline duties on hundreds of billions of dollars in bilateral goods reset to pre-truce levels on the November deadline. Bessent called Sunday's session "successful," though most desks still expect a short-term truce extension and cosmetic rare-earth gestures rather than a structural deal. US equity futures took the talks as a modest positive: S&P 500 futures were up 0.42%, Nasdaq-100 futures 0.58%, and Dow futures 0.36% in early trading, building on a Dow that had just posted its third straight losing week.
Futures shrugged off a fresh escalation in the Gulf conflict over the weekend: Saudi Arabia confirmed Saturday that Houthi rebels fired a ballistic missile at Riyadh — the first time the group has targeted the Saudi capital directly since the war widened — along with further attempted strikes on Bisha, Taif, Farasan and Yanbu; all were intercepted, continuing a run of attacks that has included a civilian death from drone debris earlier in the week. Yet the oil market read the weekend as net non-escalatory: Brent held near $103.87/bbl, little changed, after US Central Command said Hormuz shipments have hit a six-month high, with allied crude tankers moving more than 1 billion barrels through the strait in the past two months as mine-clearance and naval-escort efforts take hold. The Strait itself remains formally closed to ordinary commercial traffic — Iran continues to insist it won't reopen until its conditions are met, and PortWatch still logs roughly 8 transits a day against an 85-a-day pre-crisis baseline — but the escorted-volume trend is the first concrete sign that the physical squeeze on supply is easing even as the shooting war continues.
02Stock market & economy
Friday's cash session closed out the Fed-hike week on a quiet note: the S&P 500 added 0.17% to 7,650.50, the Nasdaq Composite rose 0.39% to 26,522.55, while the Dow slipped 0.18% to 51,682.64. The 10-year Treasury yield eased to around 4.94% after shedding nearly 10 basis points from the 5.04% intraday high hit ahead of Wednesday's decision, as softer oil took some pressure off the inflation outlook. Gold held near $4,278-4,300/oz, still range-bound as the hawkish-Fed and easing-oil crosscurrents roughly offset each other. European futures pointed to a firmer open, with Euro Stoxx 50 contracts around 6,337, while liquidity across Asian and European desks was thinner than usual for a Monday morning as traders positioned ahead of the week's main event.
For the unhedged USD sleeve (MSCI World ETF, S&P 500 ETF, High Dividend Yield ETF), the Trump-Xi summit is now the week's dominant catalyst alongside the still-unresolved question of further Fed tightening: a truce extension would be a straightforward tailwind for the mega-cap tech names that dominate these funds' weightings, while a breakdown over rare earths or AI guardrails would hit the same names directly given their reliance on Chinese-sourced inputs. High Dividend Yield ETF's value and energy tilt remains the natural hedge if the Gulf situation reverses course. For AEX index ETF and EURO STOXX 50 ETF, easing oil and a modestly calmer Treasury market are a small net positive after three weeks of tightening-driven pressure, though both remain exposed to whatever tariff signal comes out of Thursday's summit given Europe's own trade exposure to China.
03Also in the news
Russia-Ukraine diplomacy remains stalled exactly where recent briefs left it: US envoys Steve Witkoff and Jared Kushner met separately with Putin in Moscow and Zelensky in Kyiv earlier this month, but Russia's demand for a full Ukrainian withdrawal from remaining Donetsk territory and Ukraine's rejection of unilateral concessions remain the core sticking points, with the next round of trilateral talks not expected before October. Beijing's rare-earth underdelivery, flagged above as a summit agenda item, is not a new complaint — Chinese export volumes of critical materials like yttrium remain a fraction of pre-restriction levels even after Beijing's November pause on new controls — but it now sits formally on the table between Bessent and He Lifeng for the first time, making Thursday's summit the most concrete test yet of whether that log-jam actually breaks.
04Off the beaten path
how a 15-fold jump in one obscure metal's price is quietly taxing the AI buildout
Yttrium is not a name that shows up in any portfolio holding, but it is a useful lens on a supply chain most investors never think about. China exported just 17 tons of the metal to the US in the eight months through December 2025, against 333 tons in the equivalent period before its 2025 export restrictions began — a collapse that has pushed yttrium prices roughly 15-fold higher and rippled into US aerospace and semiconductor manufacturing, where it's used in specialty alloys, phosphors, and ceramic components. February's exports ticked up to 20 tons, still barely a third of pre-restriction levels, and Beijing's diplomatic gestures so far have come with no binding volume commitments or licensing transparency — meaning the restriction's optionality stays entirely on China's side of the table regardless of what gets said publicly this week.
The read-through for a diversified portfolio is indirect but real: every hyperscaler and chipmaker that anchors MSCI World ETF and S&P 500 ETF's tech weighting sources some fraction of its inputs from a rare-earth and specialty-metals supply chain that China still substantially controls, and cost pressure anywhere in that chain eventually shows up in margins or capex guidance even when it never makes a headline of its own. Thursday's summit is unlikely to resolve this on its own — Beijing has strong incentives to keep the restriction as negotiating leverage for exactly this kind of talks cycle — but it's worth tracking whether any concrete licensing commitment emerges, since that would be a more durable signal for the AI capex story than the tariff-truce headline everyone else will be watching.
Compiled from Bloomberg, CNBC, Reuters, Al Jazeera, The Jerusalem Post, Kyiv Post, TheStreet, Yahoo Finance, Trading Economics, CSIS, and DiscoveryAlert. This is a news summary, not investment advice — no position sizing or timing recommendations are implied.