On Friday, U.S. stock markets closed in negative territory as investors remained cautious ahead of high-stakes trade talks between the United States and China. Market participants reacted to recent remarks from U.S. President Donald Trump regarding tariffs on Chinese imports, which added to the uncertainty surrounding the upcoming negotiations. Despite the modest decline on Friday, losses for the week were relatively contained, signaling a wait-and-see approach by investors.
At the close of the trading session, the three major Wall Street indexes recorded slight losses. The Dow Jones Industrial Average fell by 0.29%, the S&P 500 slipped by 0.24%, and the Nasdaq Composite declined by 0.21%. This marked the second weekly loss in a row for the U.S. equity market, although the downward momentum remained moderate. Analysts noted a cautious tone in trading, with lower volumes than average, as traders held back on major moves before the outcome of the U.S.-China talks became clearer.
Meanwhile, European stock markets finished the week on a positive note. The pan-European STOXX 600 index rose by 0.8%, supported by gains in technology and energy shares. Germany’s DAX advanced by 0.9%, France’s CAC 40 added 0.7%, and the UK’s FTSE 100 gained 0.6%. European investors appeared more optimistic, partly due to expectations that a breakthrough in the U.S.-China dialogue could improve global trade sentiment.
The trade negotiations between the two global economic powerhouses took place over the weekend in Washington. According to statements made by U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamison Greer, both sides made what was described as “substantial progress” toward reducing tensions and moving closer to a mutual understanding on trade policy. Speaking to Bloomberg, Greer highlighted the pace of the discussions, noting that both parties reached common ground faster than expected, which may suggest that the differences are not as wide as initially feared.
While the U.S. side provided early indications of optimism, the Chinese delegation has not yet released any official comments. Analysts expect that Beijing will respond after further internal consultations and that a public statement could follow early next week. Market observers are watching closely for any signals from Chinese state media or the Ministry of Commerce that could confirm or challenge the U.S. assessment of progress.
Both Washington and Beijing are reportedly focusing on reducing tariff barriers, establishing mechanisms for better dispute resolution, and agreeing on technology-sharing standards. Sources familiar with the talks suggest that discussions also touched upon intellectual property protections and enforcement mechanisms — two long-standing points of contention between the countries.
Looking ahead, more details of the talks are expected to be unveiled on Monday, which could provide further clarity on whether a longer-term agreement is within reach. Market participants are particularly interested in whether either side will announce temporary suspensions or reductions in tariff rates, which could provide immediate relief to global supply chains and manufacturing sectors.
Bond markets remained relatively stable on Friday. The yield on the 10-year U.S. Treasury note held near 4.23%, while two-year notes traded around 4.65%. In currency markets, the U.S. dollar index remained flat at around 103.8, with traders awaiting further developments on trade before making directional bets. The Chinese yuan showed little movement in offshore trading, holding near 7.24 per dollar.
In commodities, gold prices edged higher as some investors sought safe-haven assets ahead of the weekend’s developments. Spot gold closed at $3,078 per ounce, while silver rose slightly to $27.90. Oil prices were mixed, with Brent crude ending at $81.80 per barrel and West Texas Intermediate (WTI) at $78.20.
As the new week begins, attention will remain squarely on how financial markets digest the results of the U.S.-China discussions. Traders, analysts, and corporate leaders alike are hoping for a tangible de-escalation in trade tensions — a factor that could play a key role in shaping the global economic outlook for the remainder of 2025.
