US Traders Monitor Developments on Relations with China Amid Concerns Over Key Industries

US Stocks Prepare for High-Stakes Meeting Between Trump and Xi Jinping

The upcoming meeting between US President Donald Trump and his Chinese counterpart Xi Jinping is set to be a critical test for stocks, which have been recording one record after another. As the high-profile talks scheduled for Thursday and Friday approach, US investors seem largely unperturbed, with the S&P 500 Index projected to move about 0.7% on each of these days, according to data compiled by Piper Sandler.

Despite concerns about geopolitics and the pace of inflation, some chief executives who are attending the summit in Beijing are already seeing share prices of their companies rise. Nvidia Corp., co-founded by Jensen Huang, who joined Trump on his visit to China as a last-minute addition, rose 2.7% on Wednesday. Shares of Micron Technology Inc. and Qualcomm Inc. climbed 3.5% and 3.2%, respectively, while Tesla Inc. gained 4% and Boeing Co. rose 1.9%.

However, the sanguine outlook in the face of wider concerns creates the risk of a surprise for markets trading at all-time highs. Discussions are expected to cover tariffs and the war in Iran, as well as trade in sectors such as aerospace, agricultural products, critical minerals, and technology.

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Wall Street investors will be monitoring various sectors and stocks for any reaction to the summit. Boeing and its suppliers are expected to be among the most closely watched, with China considering a deal for about 500 Boeing 737 Max aircraft. An order for Boeing planes would effectively be a purchase of General Electric Co. engines, fueling demand for RTX Corp.'s Collins equipment business.

In the agriculture and ag equipment sector, any commitment by China to buy US agricultural products would be a boon for American farmers, who are struggling due to last year's trade tensions. Deere & Co. and Corteva Inc. could move the most, according to Oppenheimer analyst Kristen Owen. Chinese officials are in discussion with their US counterparts to buy crops including corn and soybeans.

The critical minerals sector is also expected to be a key focus area, with China's control over rare earth metals potentially being used as leverage. An agreement on flows of the metals is a risk to shares of MP Materials Corp., which has emerged as a US champion. The US government has also taken a stake in rare earth contender USA Rare Earth Inc., as well as critical mineral players Lithium Americas Corp. and Trilogy Metals Inc.

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Finally, China's access to artificial intelligence semiconductors may also be on the agenda, with Nvidia having already secured a license to sell some less-advanced processors to customers there. Any movement could give the latest boost to US semiconductor stocks that are already on a record-shattering run.