US-China Trade Deal Sparks Market Rally: Fed Cuts and Magnificent Seven Earnings in Focus

In a volatile economic landscape, positive developments in US-China trade negotiations are igniting fresh optimism across global markets. As investors eye potential tariff relief and upcoming Federal Reserve decisions, the stock market is experiencing a notable upswing. Recent reports suggest that US and Chinese officials have forged a preliminary agreement to sidestep steep tariffs 100% and 157% on Chinese importsslated for November 1, 2025.

With Presidents Donald Trump and Xi Jinping scheduled to convene in South Korea later this week, markets reacted swiftly: the Dow Jones surged 300 points, the S&P 500 climbed 0.9%, and the Nasdaq jumped 1.4%. This breakthrough comes at a critical time, alleviating fears of escalating trade wars that have loomed over global economies.

Experts like Ali Canal from Yahoo Finance highlight this as part of a trifecta of market drivers, including Fed policy and tech earnings. For investors searching for US-China trade deal updates, this momentum could signal a broader rally. It may lead to a Santa Claus rally with an 80% historical probability of 4% gains in November-December if October closes positively.

Feds Cut and What To Expect

The Federal Reserve is anticipated to deliver a 25-basis-point rate cut on October 29, 2025 marking the second consecutive reduction. Amid a US government shutdown that’s stalled key economic data releases, attention turns to Fed Chair Jerome Powell’s post-decision remarks. Inflation hovers stubbornly around 3%, and the labor market remains a focal point, with no clear signs of major disruptions yet. For those querying Fed rate cut October 2025, the outlook for a December cut is uncertain, hinging on Powell’s tone regarding employment and growth.

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