Stock Market Approaches Record Highs Amid Optimism Over U.S.-China Trade Talks and Strong Economic Data

The S&P 500 index surged to its highest level since February, closing above 6,000 points last week and continuing to hover near record highs as investors react to positive developments in U.S.-China trade negotiations and robust economic data. The index ended Monday’s session at 6,005.88, just over 2% below its all-time peak, while the Nasdaq climbed 0.31% to 19,591.24 points. The Dow Jones Industrial Average, however, experienced a modest decline, reflecting a mixed performance across major indices.

Investor sentiment has been buoyed by the postponement of new tariffs and hopes that ongoing trade talks between Washington and Beijing, which began this week in London, will result in less severe trade restrictions than previously feared. This optimism follows a period of significant volatility earlier in the year, when aggressive tariff proposals from the Trump administration sent markets tumbling. Since bottoming out in early April, the S&P 500 has rebounded by more than 20%.

Large institutional investors, previously cautious, are now showing renewed confidence in equities, with some analysts predicting a continued “melt up” as the quarter draws to a close. Major banks including Goldman Sachs, UBS, Deutsche Bank, and JPMorgan Chase have all raised their year-end targets for the S&P 500, citing stronger-than-expected corporate earnings and the accelerating impact of artificial intelligence on growth.

Key corporate earnings reports from companies such as Intuit and Insulet have contributed to market gains, while trade-sensitive stocks like PDD Holdings have faced sharp declines amid ongoing uncertainty. Apple shares remain under pressure due to potential tariffs on iPhones manufactured overseas, with analysts advising caution as trade policy remains unsettled.

Looking ahead, investors are closely watching upcoming events including Apple’s Worldwide Developers Conference and GameStop’s earnings report for further market direction. Additionally, new data on consumer and wholesale inflation for May, as well as the Federal Reserve’s next policy decision, are expected to influence market sentiment in the coming weeks.

Despite the positive momentum, analysts caution that markets remain highly sensitive to any negative headlines related to trade negotiations, and that volatility could quickly return if talks falter or new tariffs are announced. For now, the combination of easing trade tensions, solid jobs data, and strong corporate performance continues to drive optimism on Wall Street.