U.S. stocks advanced on Thursday, buoyed by optimism following a positive trade discussion between President Donald Trump and Chinese President Xi Jinping, as well as labor data that reinforced expectations for a potential interest rate cut.
By 11:35 AM ET, the Dow Jones Industrial Average was up 140 points (0.3%), the S&P 500 climbed 35 points (0.4%), and the NASDAQ Composite added 130 points (0.7%).
Trump and Xi Signal Progress on Trade
President Trump described a 90-minute call with President Xi as “very good,” with the conversation centering on trade matters—especially rare earth exports. Both leaders agreed to resume negotiations, with U.S. representatives Scott Bessent, Howard Lutnick, and Jamieson Greer expected to meet Chinese officials soon.
Trump noted that the dialogue was limited to trade, emphasizing that Russia, Ukraine, and Iran were not discussed. The call also resulted in mutual invitations for upcoming state visits, further signaling a thaw in tensions.
Jobless Claims Rise, Fueling Rate Cut Hopes
On the economic front, fresh data showed an increase in first-time unemployment claims, with seasonally adjusted filings rising to 247,000 for the week ending May 31—up from a revised 239,000 the prior week, and above the consensus forecast of 236,000.
The four-week moving average also rose to 235,000, compared to the previous 230,500, suggesting a gradual cooling in the labor market. The rise in claims followed weaker-than-expected ADP private payrolls data and came just ahead of Friday’s nonfarm payrolls report, which is expected to show 130,000 new jobs in May.
These figures add to growing concerns that Trump’s tariff-driven trade agenda is beginning to weigh on business hiring and investment decisions.
Minneapolis Fed President Neel Kashkari commented Wednesday evening that the labor market appears to be slowing, and that the Federal Reserve should maintain a cautious stance amid ongoing economic uncertainty.
Meanwhile, the European Central Bank moved to stimulate its own economy by cutting interest rates by 25 basis points, marking its eighth cut since last June, as it grapples with slowing inflation and the broader effects of global trade tensions.
Corporate Earnings: Broadcom in Focus
The corporate earnings season is winding down, but Broadcom (NASDAQ: AVGO) is set to headline Thursday’s reports. Investors are watching closely for insights into AI chip demand, particularly in the face of a murky economic outlook and rising scrutiny over tech spending.
Some market watchers are cautious amid signs that companies may be pulling back on AI investments, especially following the emergence of a low-cost AI model from China’s DeepSeek. However, major U.S. tech firms continue to affirm aggressive investment plans in the sector.
Elsewhere:
- Five Below (NASDAQ: FIVE) shares rose after the retailer beat first-quarter estimates and issued strong Q2 guidance, supported by solid performance across its product categories.
- MongoDB (NASDAQ: MDB) surged after posting better-than-expected results and issuing an upbeat annual forecast, alongside announcing an expanded share buyback program.
Oil Prices Rebound
In energy markets, oil prices recovered from recent losses, rising in Thursday trading as concerns over weakening demand lingered.
By 11:40 AM ET, Brent crude was up 1% to $65.51, and WTI crude gained 1.1% to $63.53 per barrel. The gains followed a more-than-expected 4.3 million-barrel drop in U.S. crude inventories last week.
Still, the market was cautious due to a 5.2 million-barrel jump in gasoline stocks and a 4.2 million-barrel increase in distillates, which cast doubt on fuel demand strength heading into the peak summer travel season.
