Wall Street hovered around the flatline on Monday, marginally inching towards its record highs despite Nvidia (NVDA) and AMD (AMD) falling after the two companies agreed to pay the US government 15% of the revenue for certain chip sales to China.
Traders also focused on any progress on Russia and Ukraine ahead of US president Donald Trump’s meeting with Russian president Vladimir Putin, as well as a key inflation reading this week.
Trump has pushed for a ceasefire, stating on Friday that he is set to meet Putin this week in Alaska to negotiate an end to the war in Ukraine.
The deal will reportedly involve “some swapping of territories” with suggestions that it would see Ukraine ceding Russia the parts of Donbas that it still controls.
Ukraine’s president Volodymyr Zelenskyy was quick to reject the idea and European leaders have called for any peace talks with Russia to include Kyiv.
Bloomberg reported on Sunday that European leaders are seeking to speak with Trump before his meeting with Putin.
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The FTSE 100 (^FTSE) and European stocks were mixed on in afternoon trade as US tariffs on China are due to come in on Tuesday, although the 90-day truce could get extended again.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “There’s a small surge of Monday motivation for the Footsie, with the index opening higher in early trade. A pulse of positivity also sent stocks on Wall Street back towards record levels on Friday and US indices are set for a higher open as optimism continues to swirl.
“But there could be a swift change in sentiment. The focus will be on US inflation numbers out this week, a key determiner for the Fed’s interest rate decision next week. With Trump’s tariffs set to make swathes of goods more expensive for American consumers and businesses, investors will want to see to if higher prices are landing and what the outlook is likely to be ahead.”
“There are hopes that Trump and Putin’s meeting in Alaska later this week will help push the Ukraine conflict to a resolution, which is helping calm concerns over energy supply disruptions. Threats of extra tariffs on India, which buys Russian crude, pushed up oil prices, but they are in retreat amid expectations the meeting could pave the way for the lifting of sanctions on Russia.
“As traders mull the effect on global growing in the tariff era, forecasts for lower energy demand are also acting as a drag on prices, with Brent Crude hovering around $66 a barrel, the lowest in two months. Gold prices have also retreated a little amid hopes for an easing of geo-political tensions. But there is still uncertainty hanging around the market, surrounding concerns about gold bar imports into the US being taxed.”