Markets mixed as Trump-Xi trade call offers hope amid weak U.S. economic data

Wall Street closed mostly flat on Thursday as investors weighed renewed trade dialogue between U.S. President Donald Trump and Chinese President Xi Jinping against a batch of disappointing economic data, just ahead of a closely watched U.S. jobs report due Friday.

Wall Street edged higher on Thursday as investors weighed renewed trade discussions between U.S. President Donald Trump and Chinese President Xi Jinping against a slate of disappointing U.S. economic data ahead of Friday’s pivotal jobs report.

In a volatile session, the S&P 500 and Nasdaq closed slightly lower, while the Dow Jones Industrial Average ended marginally in positive territory. U.S. Treasury yields fluctuated throughout the day, and gold prices softened.

President Trump and President Xi held a phone call on Thursday aimed at easing ongoing trade tensions between the world’s two largest economies. Both sides confirmed that they agreed to continue discussions—a development that helped calm markets.

“The market seems to be accepting that if they’re talking, they’re not going to do anything drastic,” said Thomas Martin, Senior Portfolio Manager at GLOBALT in Atlanta. “People are just sort of guessing which way the wind is blowing—and it keeps shifting. Investors want to own stocks and fear missing out, but they’re also wary of a potential disaster.”

Economic Data Raises Questions Ahead of Jobs Report

Fresh U.S. economic data painted a mixed picture. Initial jobless claims rose to their highest level since October, and the trade deficit narrowed sharply in April due to a 16.3% drop in imports—largely attributed to the impact of U.S. tariffs.

Meanwhile, labor market indicators showed signs of weakness. Challenger layoffs surged 47% year-over-year, and private payrolls from ADP came in well below expectations. These figures have tempered optimism ahead of the Labor Department’s May employment report, due Friday.

Some analysts, however, see a silver lining in the softer data.

“The recent benign inflation figures and rising jobless claims could give the Federal Reserve room to implement more than one rate cut this year,” said Matthew Keator, Managing Partner at the Keator Group in Lenox, Massachusetts. “That could be encouraging for certain sectors.”

Market Recap

Dow Jones Industrial Average rose 62.89 points, or 0.15%, to 42,491.60

S&P 500 fell 3.56 points, or 0.06%, to 5,967.38

Nasdaq Composite declined 40.84 points, or 0.22%, to 19,419.88

ECB Cuts Rates, Hints at Possible Pause

In Europe, the European Central Bank (ECB) lowered its three key interest rates by 25 basis points, citing a more stable inflation outlook. While the decision was widely expected, ECB President Christine Lagarde suggested the bank may pause its rate-cutting cycle during the summer.

European stocks initially gained following the announcement but pared back those gains by the close.

Pan-European STOXX 600 rose 0.16%

FTSEurofirst 300 added 0.19%

MSCI’s global stock index ticked up 0.02% to 889.10

Global Markets Mixed

Emerging markets and Asia-Pacific shares saw modest gains, while Japan’s Nikkei declined.

MSCI Emerging Markets Index rose 0.84% to 1,182.31

Asia-Pacific Index (excluding Japan) climbed 0.82% to 622.95

Japan’s Nikkei fell 0.51% to 37,554.49

Currency and Bond Markets

The dollar reversed earlier gains after weaker U.S. data and the ECB’s dovish tone.

Dollar Index inched up 0.02% to 98.81

Euro gained 0.14% to $1.1433

Dollar/Yen rose 0.67% to 143.73

U.S. Treasury yields fluctuated, reflecting market uncertainty ahead of Friday’s labor market data:

10-year yield rose to 4.395%

30-year yield edged down to 4.8856%

2-year yield climbed to 3.928%, indicating shifting expectations for Fed policy

Oil and Gold

Crude prices rose despite bearish inventory data and Saudi Arabia’s price cuts for Asia, as the Trump-Xi call raised hopes for improved trade ties.

U.S. crude settled up 0.83% at $63.37 per barrel

Brent crude rose 0.74% to $65.34 per barrel

Gold reversed earlier gains as easing trade tensions reduced demand for safe-haven assets:

Spot gold fell 0.65% to $3,353.64 an ounce

U.S. gold futures declined 0.72% to $3,349.20 an ounce

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