NEW YORK — U.S. stocks are drifting higher on Monday as the world’s two largest economies begin talks on trade that could help avoid a recession.
The S&P 500 rose 0.3% in afternoon trading. The Dow Jones Industrial Average was rose 100 points, or 0.2%, as of 2:05 p.m. Eastern time, and the Nasdaq composite was 0.4% higher.
Officials from the United States and China are meeting in London to talk about a range of different disputes that are separating them. The hope is that they can eventually reach a deal that will lower each’s punishing level of tariffs against the other, which are currently on pause, so that the flow of everything from tiny tech gadgets to enormous machinery can continue.
Hopes that President Donald Trump will lower his tariffs after reaching such trade deals with countries around the world have been among the main reasons the S&P 500 has rallied so furiously since dropping roughly 20% from its record two months ago. It’s back within 2.1% of its all-time high, which was set in February, and it’s higher than it was before Trump shocked financial markets with his wide-ranging tariff announcement on what he called “Liberation Day.”
This may be the shortest sell-off following a shock of heightened volatility on record, according Parag Thatte, Binky Chadha and other strategists at Deutsche Bank. Typically, stocks take around two months to bottom following a spike in volatility and then another four to five months to recover their losses. This time around, stocks have basically made a round trip in less than two months.
But nothing is assured, of course, and that helped keep trading relatively quiet on Wall Street Monday.
Warner Bros. Discovery fell 1.7% after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will hold onto CNN, TNT Sports and other entertainment, sports and news television brands around the world, along with some digital products.
IonQ rose 3.5% after the quantum computing and networking company said it agreed to buy Oxford Ionics for nearly $1.08 billion. All but $10 million of the purchase price will come from IonQ’s stock, and the hope is that the combined company will benefit from its complementary parts to produce computers that can perform better than classical machines.
Tesla, meanwhile, drifted following some sharp swings. The electric vehicle company tumbled last week as Elon Musk’s relationship with Trump broke apart, and it rose 1.2% Monday.
The frayed relationship could also end up damaging Musk’s other companies that get contracts from the U.S. government, such as SpaceX. Rocket Lab, a space company that could pick up business at SpaceX’s expense, rose 5.3%.
In stock markets abroad, indexes were modestly lower in Europe after rising across much of Asia.
Chinese markets climbed even though the government reported that exports slowed in May, growing 4.8% from a year earlier after jumping more than 8% in April. China also reported that consumer prices fell 0.1% in May from a year earlier, marking the fourth consecutive month of deflation.
Stocks rallied 1.6% in Hong Kong and rose 0.4% in Shanghai.
In the bond market, the yield on the 10-year Treasury eased to 4.47% from 4.51% late Friday. It fell after a survey by the Federal Reserve Bank of New York found that consumers’ expectations for coming inflation eased a bit in May.
That provides some relief for the Fed, which has been keeping its main interest rate steady as it waits to see how much Trump’s tariffs will raise inflation and how much they will hurt the economy.
Economists expect a report coming on Wednesday to show inflation across the country accelerated last month to 2.5% from 2.3%.
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AP writer Jiang Junzhe contributed.
By Stan Choe
