Crypto and stock markets react to scheduled US-China trade talks

Stock and crypto markets showed signs of cautious optimism late Tuesday after reports confirmed that senior US officials are scheduled to meet with their Chinese counterparts later this week in Switzerland. The S&P 500 index shed 0.77% in Wednesday’s pre-market session, while the global crypto market cap recorded a 1.26% increase in the last 24 hours to cross $3 trillion.

According to the Wall Street Journal, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to hold discussions with China’s top economic official on Thursday. News of the talks, expected to take place in Zurich, started a rally in stock-index futures overnight, correcting two consecutive days of market declines.

Stock futures rebound after consecutive market losses

Following the announcement of the US-China planned meeting, S&P 500 futures climbed approximately 0.8%, while Dow Jones Industrial Average futures rose 196 points, or 0.42%. Nasdaq 100 futures advanced by 0.48%. The rebound comes after Tuesday’s regular session saw losses across all major US indexes.

The Dow had dropped nearly 400 points, or 0.9%, while the S&P 500 slid by 0.8%. The Nasdaq Composite fell 0.9%, pulled lower by a selloff in Palantir shares that saw disappointing earnings. Investor sentiment had already been rattled by macroeconomic concerns and a lack of progress on trade deals.

Earlier in the day, Canadian Prime Minister Mark Carney met with President Donald Trump at the White House. Carney pushed back against provocative comments from the US president asking Canada to be absorbed as the 51st US state, saying his country “isn’t for sale.”

On the digital asset side, the altcoin market cap broke out of a prolonged falling wedge pattern, but faces headwinds at the 21-day and 50-day moving averages, acting as resistance levels.

#ALTS MARKET CAP ANALYSIS

The ALTS market cap has broken out of a falling wedge pattern with strong volume, indicating potential bullish momentum. However, it is currently facing rejection from both the 21-day and 50-day moving averages, which are acting as key resistance levels… pic.twitter.com/rUtfqfR3Xk

— CryptoPulse (@pulse_crypto_) May 7, 2025

Per CoinGecko data, the largest crypto by market cap Bitcoin is up 2.4% intraday. The coin is still in a consolidation phase after rallying briefly in late April back up to $90,000. 

Bitcoin is trading just above the $96,800 resistance zone and has been oscillating in a tight range, but the overall structure remains bullish. It continues to hold the $91,000 support level, well above both its 100-day and 200-day moving averages. No major signs of bearish reversal or a deeper pullback are visible on the daily chart.

Corporate America struggles with trade uncertainty

Several US companies are reportedly still assessing the “damage” done by tariffs and geopolitical uncertainty, and look more likely to revise their forecasts for the fiscal year 2025.

Automaker Ford projected that tariffs could reduce one of its core profit measures by as much as $1.5 billion. Ford shares surprisingly rose 2.7% before markets opened on Wednesday. 

Toy giant Mattel saw a 2.8% gain after revealing plans to raise prices and shift production out of China to counter an expected $270 million tariff burden.

US Fed meeting in focus

Meanwhile, attention is turning to the Federal Reserve, whose two-day policy meeting began Tuesday. The central bank is expected to hold interest rates steady, but markets are awaiting Fed Chair Jerome Powell’s press conference for any insight into the Fed’s stance on inflation and economic risks stemming from the trade conflict.

According to CME’s FedWatch tool, futures are pricing in a 97% chance that the Fed will maintain its current rate.

In the bond market, a $42 billion auction of 10-year Treasury notes is now in high demand. Non-compulsory bidders snapped up 91.1% of the issuance, the highest percentage since February 2023. According to over-the-counter interbank quotes, the yield on the 10-year note fell and settled around 4.305% at the time of this publication.

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