Stocks recorded a significant increase on Monday and Tuesday after U.S. officials announced progress in negotiations with China regarding tariff reductions and restrictions on rare earth exports. Investors are preparing for a potential agreement between President Donald Trump and Chinese leader Xi Jinping, which could bring short-term relief to the tense trade relations.

As a result, according to TradingView, the S&P 500 Index rose by 1.50% since the beginning of the week, reaching a new all-time high of 6,900 points.

U.S.-China agreement

In recent weeks, markets had declined after Trump threatened to impose 100% tariffs on Chinese imports and introduce new restrictions on the export of American software. However, once China showed willingness to negotiate, stocks in Beijing started to rise again.

The situation quickly turned around. Gains were not only seen in the U.S., but global stocks in general also moved higher. On the other hand, gold, as a traditional safe haven, weakened slightly. According to Reuters, this indicates that investors are willing to take on more risk in anticipation of favorable outcomes.

Even if the negotiations between Trump and Xi Jinping do not lead to a complete resolution of the trade war, stock markets will likely react optimistically to any signs of improvement in relations. For investors, any easing of tensions is a signal that risk is decreasing — and that’s usually the best reason for markets to rise.

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Stocks reacted positively

The S&P 500 Index responded exceptionally well this week to news of progress in U.S.-China negotiations. Since the beginning of the week, it has gained 1.50% and reached its all-time high at 6,900 points.

Investors see the current developments as a sign of stabilizing global trade and a return of confidence to the markets, which has supported the growth of most major stock indices outside the United States as well. Gains were recorded not only in the U.S. but also in markets in South Korea, Taiwan, and Japan, which have reached new highs.