U.S. Stocks Edge Higher After Trump-Xi Call as Economic Uncertainty Lingers
U.S. markets opened in positive territory on Thursday, buoyed by reports of a phone call between President Donald Trump and Chinese President Xi Jinping—an encouraging signal amid ongoing global economic jitters. Although the initial boost faded slightly during early trading, the Dow Jones Industrial Average, S&P 500, and Nasdaq all started the day higher.
The call between the two leaders, confirmed by Chinese state media outlet Xinhua, comes just days after President Trump accused China of breaching a recently signed trade agreement. While details of the conversation remain limited, the dialogue has injected a measure of optimism into markets still sensitive to developments in U.S.-China relations. Earlier this year, major indexes saw a similar upswing following bilateral trade talks in Switzerland.
Despite the upbeat opening, the broader economic picture remains mixed. Bitcoin hovered around $105,000, signaling steady demand for alternative assets. Meanwhile, investor sentiment is still being weighed down by ongoing concerns over global growth and weak labor market signals in the U.S.
Fresh data from the Labor Department showed that weekly jobless claims rose for the second week in a row, climbing by 8,000 to a seasonally adjusted 247,000. This marks the highest level since October 2024 and exceeds economists' forecast of 237,000. The numbers suggest that the labor market could be losing steam.
Adding to the cautious outlook, U.S. worker productivity declined in the first quarter of 2025. According to the Bureau of Labor Statistics, nonfarm business productivity fell at an annualized rate of 1.5%, while unit labor costs surged 6.6%. These figures reflect the economic drag from prolonged tariff uncertainty and rising input costs.
On the international front, the European Central Bank (ECB) cut its deposit rate by 25 basis points, bringing it down to 2%. This marks the ECB’s seventh consecutive rate cut, down from a peak of 4% in mid-2023. The move follows eurozone inflation easing to 1.9% in May, just under the bank’s 2% target.
In the U.S., monetary policy remains a hot-button issue. President Trump has recently criticized Federal Reserve Chair Jerome Powell for holding interest rates steady despite signs of a cooling economy. With inflation concerns, trade tensions, and shifting monetary policies all in play, markets are navigating a delicate balance between optimism and caution.