US-China Trade Talks Yield Vague Framework, Markets React Cautiously

Financial markets responded cautiously to the recent U.S.-China trade talks in London, which resulted in a vague framework agreement without detailed terms or a timeline. U.S. Commerce Secretary Howard Lutnick emphasized that the deal, which aims to resolve issues around rare earth minerals and magnets, would be reviewed by President Trump before implementation. Despite some optimism about ongoing dialogue, investors remained skeptical about the framework's ability to produce a comprehensive trade deal, given the history of previous stalled negotiations and pending U.S. tariffs upheld by a federal appeals court. Equity markets showed mixed but generally muted reactions, with modest gains in Asian stocks, including South Korea and China, while U.S. futures and European shares edged lower. Currency markets also exhibited limited movement, reflecting uncertainty about the deal's impact amid anticipation of upcoming U.S. inflation data and Treasury auctions. Analysts warn that, while the talks reduce immediate tensions, significant challenges remain that could prolong trade uncertainty and economic risks.