US equities hovered near the flatline on Tuesday, with major indexes showing limited movement as market participants remained focused on the ongoing trade negotiations between Washington and Beijing.
The Dow Jones Industrial Average slipped 11 points, while the S&P 500 and Nasdaq Composite each added around 0.2%.
The cautious tone reflects investor hesitation amid a lack of clarity on whether the high-stakes talks will yield a substantive breakthrough.
The negotiations, now in their second day in London, have drawn considerable market attention.
US Commerce Secretary Howard Lutnick told reporters on Tuesday that discussions are “going well,” and described the meetings as intensive, saying they “expect the talks to continue all day.”
Traders are looking for confirmation that the two sides are moving toward a durable agreement that would avoid the re-imposition of steep tariffs.
Last month, the US and China agreed to a 90-day suspension of certain duties, which helped ease tensions after President Donald Trump announced sweeping tariff measures in April.
The current phase of talks is viewed as critical for sustaining that momentum.
Investors are particularly focused on the potential for permanent reductions in tariffs and a framework to ensure compliance, both of which could help stabilize trade flows and reduce macro uncertainty.
Traders await progress in US-China trade negotiations
Trade negotiations between the United States and China entered a second day in London, raising hopes of a potential easing in tensions between the world’s two largest economies.
US Commerce Secretary Howard Lutnick said the discussions were progressing well.
Lutnick was joined by Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer for the talks with their Chinese counterparts.
The meeting marked the first in-person engagement between Bessent and Chinese Vice Premier He since a 90-day truce was brokered on May 12 in Geneva.
That agreement included a mutual reduction in tariffs and aimed to cool down escalating trade hostilities.
Since the truce, progress has been uneven, with Beijing reportedly delaying approvals for rare-earth exports—materials vital to sectors like defense, automotive, and technology.
The bottlenecks have disrupted manufacturing supply chains across the US and Europe.
Markets are watching the developments closely. Any breakthrough in the talks would likely lift investor sentiment, which has been weighed down by tariff uncertainty and geopolitical volatility.
The MSCI All-Country World Index hovered near record highs, and the US dollar remained stable against major currencies.
Ahead of this week’s talks, White House officials have reportedly signaled that Washington may consider easing chip export restrictions if China agrees to expedite the flow of rare earths, signaling a possible trade-off to secure mutual economic relief.
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