US-China Rare Earths Deal Nudges Wall Street
Stock market anticipation halted as diplomatic exchanges between US and China unfold
As of Monday, June 11, 2025, Wall Street's outlook has slightly improved, following the recent agreement between the US and China regarding rare earths exports. In response, investors are cautiously optimistic, as ongoing trade talks between the world's two largest economies might ease some economic uncertainties.
The Dow Jones Index maintained its position at 42,761 points, and the tech-heavy Nasdaq inched up by 0.3% to 19,591 points. The S&P 500 also edged up 0.1% to 6,005 points. Despite initial sideways movement, investors are hopeful about potential breakthroughs in proposed deals, including a basic agreement on rare earths.
Peter Cardillo, chief economist at Spartan, explained the consensus on a compromise deal, ensuring reduced trade tension and greater certainty in the industry. These developments could alleviate market fluctuations and hedge bets on tariffs.
The high-level delegations involved in the talks include Scott Bessent (US Finance Minister), Howard Lutnick (US Trade Minister), Jamieson Greer (US Trade Representative), and Vice Premier He Lifeng (China). The negotiations took place in London and emphasized the importance of rare earths, essential for sectors like automotive, robotics, and defense.
Semiconductor stocks, including Qualcomm and AMD, soared on Monday, each gaining around four percent. Kim Forrest, founder of Bokeh Capital Partners, explained that this growth potential stems from China's substantial investments in Artificial Intelligence (AI) and the possibility of other countries resuming exports to China for semiconductors.
Stock markets in Asia gained ground, with China's strategically important rare earths sector reporting particular gains. China dominates the rare earths market. However, the US dollar weakened, with the dollar index falling 0.2% to 98.973 points against a basket of currencies. The gold price rose 0.5% to $3,327 per troy ounce, with analysts attributing this boost to ongoing trade tensions, debt concerns, and weak economic growth.
China's exports saw their slowest pace in three months in May amid the trade conflict with the US, as did imports. However, deflation at the producer level has deepened due to the US-China trade conflict and a persistent slowdown in the real estate sector. Asia's stock markets, nonetheless, maintained a positive outlook, with aviation sector stocks such as Joby Aviation and Archer Aviation gaining over ten percent, while Robinhood and Apple experienced slight declines.
While the rare earths agreement represents a significant step towards stabilizing supply chains, its impact on semiconductor stocks remains indirect. As the tech sector's performance hinges on various factors including demand for electronics, technological advancements, and global economic conditions, there is no indication that the rare earths agreement has directly affected semiconductor stock prices. However, a more stable economic environment could ultimately benefit the sector in the long term.
To learn more about stock market dynamics, click here.
Sources: ntv.de, gut/rts/DJ
- Wall Street
- USA
- Rare Earths
- Dow Jones
- China
- Gold Price
- U.S. Dollar
- Apple
- Robinhood
- Donald Trump
- Xi Jinping
- The Commission, involved in the European Union's internal affairs, is also playing a role in the preparation of the draft budget, as financial investments in areas like technology and business are crucial for sustaining a favorable general-news environment.
- Wall Street's trend, influenced by the US-China rare earths deal, might inspire increased investments in tech-related sectors like AI, as China's substantial investments in AI could lead to growth in semiconductor stocks, such as Qualcomm and AMD.
- Market speculations hint at a possible long-term benefit for the semiconductor sector, as a more stable economic environment – materializing from the US-China rare earths agreement – could positively impact the industry in the future, even though the agreement's immediate effect on semiconductor stocks remains unclear.
