Wall Street mixed as US-China trade talks grab focus

Wall Street’s main indexes are mixed as investors await the outcome of ongoing trade talks between the United States and China aimed at cooling a tariff dispute that has bruised global markets this year.

US Commerce Secretary Howard Lutnick said trade talks with China were going well as officials from the two sides met for a second day in London.

Investors are hoping for an improvement in ties after the relief around a preliminary deal struck last month gave way to fresh doubts when the US accused China of blocking exports critical to sectors such as aerospace, semiconductors and defence.

White House economic adviser Kevin Hassett said on Monday the US was likely to agree to lift export controls on some semiconductors in return for China speeding up the delivery of rare earths.

“I think these issues will be resolved but I think it’s still early days … but the fact that they’re talking certainly is positive,” said Mark Malek, chief investment officer at Siebert Financial.

“We’re not making progress yards at a time but inches at a time.”

In early trading on Tuesday, the Dow Jones Industrial Average fell 20.22 points, or 0.05 per cent, to 42,742.88, the S&P 500 gained 10.30 points, or 0.17 per cent, to 6,016.18 and the Nasdaq Composite gained 53.92 points, or 0.28 per cent, to 19,645.16.

Seven of the 11 major S&P 500 sub-sectors rose, led by energy with a 1.7 per cent gain, tracking strength in oil prices.

Communication services stocks added 0.9 per cent.

US equities rallied sharply in May, with the S&P 500 index and the tech-heavy Nasdaq marking their best monthly gains since November 2023, helped by upbeat earnings reports and a softening of US President Donald Trump’s harsh trade stance.

The S&P 500 remains about 2.0 per cent below all-time highs touched in February while the Nasdaq is about 2.6 per cent below its record peaks reached in December.

Investors are awaiting US consumer prices data on Wednesday for clues on the Federal Reserve’s rate trajectory.

The World Bank slashed its global growth forecast for 2025 by 0.4 per centage point to 2.3 per cent, saying higher tariffs and heightened uncertainty posed a “significant headwind” for nearly all economies.

Shares of McDonald’s fell 1.4 per cent, weighing on the blue-chip Dow Index, after a report Redburn Atlantic downgraded the fast-food giant to “sell” from “buy”.

Most megacap and growth stocks were mixed.

Tesla shares advanced 2.6 per cent.

Insmed shares jumped 27.7 per cent after the drug maker said its experimental drug significantly reduced blood pressure in the lungs and improved exercise capacity in patients in a mid-stage study.

US-listed shares of Tencent Music Entertainment Group advanced 2.2 per cent after the Chinese company said it would buy domestic long-form audio platform Ximalaya for about $US2.4 billion ($A3.7 billion) in cash and stock.

Advancing issues outnumbered decliners by a 2.52-to-1 ratio on the NYSE and by a 1.76-to-1 ratio on the Nasdaq.

The S&P 500 posted 7 new 52-week highs and one new low while the Nasdaq Composite recorded 42 new highs and 29 new lows.