Pre-Market Pulse 10th June – Wall St Rallies on US/China meeting, while military is sent into L.A.

Overnight – Wall St Rallies on US/China meeting, while military is sent into L.A.

Stocks squeezed out a small gain as the US/China trade talks started a positive footing, while markets and financial media completely ignored that active marines joined the national guard in Los Angeles to combat riots.

President Trump ordered active marines to join the National Guard, without the consent of the Californian Governor, a move that is only been used once in US history, the 1965 civil rights demonstrations in Selma, Alabama. Financial markets and financial markets press are broadly brushing this off as a footnote, with eyes only for the US/China trade deal talks in London.

High-level trade talks between the United States and China resumed in London on Monday, with U.S. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent describing the discussions as productive. The meetings aim to reinforce a fragile 90-day truce established after negotiations in Geneva last month, which temporarily reduced tariffs and paused further escalations. Despite this pause, tensions remain high over issues such as rare earth mineral exports, advanced technology restrictions, and the broader strategic rivalry between the world’s two largest economies.

Recent trade data underscore the ongoing strain: China’s exports to the U.S. plunged by 34.5% year-on-year in May, the steepest drop since February 2020, even as overall Chinese exports grew by 4.8%—a slowdown from previous months and below market expectations. Imports from the U.S. also declined sharply, contributing to a significant reduction in China’s trade surplus with the U.S. This downturn comes amid persistent uncertainty over tariff policy, with both sides having front-loaded shipments earlier in the year to avoid anticipated tariff hikes. However, China’s exports to other regions, such as Southeast Asia and the European Union, have remained robust, helping to offset losses from the U.S. market.

Looking ahead, investors and policymakers are closely watching upcoming U.S. inflation data for further signals on the economic impact of ongoing trade tensions and tariffs. Meanwhile, the broader market is reacting to other corporate developments, such as Apple’s stock dip following an underwhelming developers conference and significant moves by companies like Warner Bros Discovery, Merck, and Baker Hughes. As trade negotiations continue, the global economy remains sensitive to the outcome, with supply chains, inflation, and sector-specific industries all affected by the evolving U.S.-China relationship