ISTANBUL

US stocks closed higher Monday, boosted by the prospect of easing trade tensions with US President Donald Trump's upcoming meeting with his Chinese counterpart, as well as increased Fed rate cut expectations.

The Dow Jones Industrial Average rose 0.71%, or 337.47 points, to close at an all-time high of 47,544.59.

The Nasdaq climbed 1.86%, or 432.59 points, to close at a record high of 23,637.46, while the S&P 500 surged 1.23%, or 83.47 points, to 6,875.16, the first time it has ended above the 6,800 threshold.

Stock markets followed a positive trend as signs of easing trade tensions between US and Chinese officials emerged over the weekend, ahead of Trump's meeting with Chinese President Xi Jinping.

About his upcoming meeting with Xi, Trump said on Monday from Air Force One: “I have a lot of respect for President Xi, and we are going to come away with the deal."

“I think we have a very successful framework for the leaders to discuss on Thursday,” said Treasury Secretary Scott Bessent from the ASEAN Summit in Kuala Lumpur, Malaysia.

That framework might involve resuming Chinese purchases of US soybeans, removing Trump's threatening 100% tariffs on China that were supposed to take effect on November 1, and delaying China's export limits on rare earths, which sparked the most recent trade spat from China.

Along with resolving the TikTok dispute, the arrangement might also involve a contract for the local version of the social video app in the US.

Aside from the potential trade truce, the expectations of a Fed rate cut on Wednesday, fueled by the lower-than-expected inflation data, also drove the markets up.

The industry most at risk from tensions with China, chipmakers, backed the surge on Monday. Broadcom and Nvidia both saw increases of over 2%.

Qualcomm shares climbed 11% in particular following the release of new AI chips that placed it in rivalry with Nvidia and AMD.

AMD shares rose nearly 3% after the US Department of Energy and AMD announced the development of two next-generation supercomputers as part of a $1 billion partnership.

On the other hand, rare earth stocks fell on Monday amid speculation that China may postpone rare earth export controls. Energy Fuels' shares tumbled 10.6%, USA Rare Earth's shares slipped more than 8.3%, and MP Materials' shares dropped 7.4%.