10.06.202513:29 Forex Analysis & Reviews: Stock Market Overview on May 9: S&P 500 and NASDAQ post sharp gains

US equity benchmarks ended the previous regular session with a pronounced surge. The S&P 500 gained 1.03%, while the Nasdaq 100 jumped 1.20%. The industrial Dow Jones added 1.05%.

Asian stock markets also climbed today ahead of trade talks between China and the US scheduled for later today, negotiations that could ease tensions between the world's two largest economies. Optimism surrounding potential progress in trade relations lifted shares of technology companies and export-driven sectors, which tend to be highly sensitive to changes in trade policy. Investors are hopeful that the talks will result in a softening of tariffs and reduced uncertainty, factors that could, in turn, stimulate global economic growth.

The regional MSCI AC Asia Pacific Index rallied 0.9% ahead of the London meetings, while technology shares rose on the back of Meta Platforms Inc.'s investment plans. Chinese stocks listed in Hong Kong climbed 1.1%. The dollar weakened against all its G-10 counterparts. Yields on 10-year Treasuries fell roughly two basis points to 4.49%, retracing Friday's advance. Futures on the S&P 500 edged 0.2% lower, while European equity futures dipped 0.1%.

Trade tensions appeared to ease between President Donald Trump and Chinese leader Xi Jinping after a standoff over critical minerals was resolved, paving the way for continued negotiations. Market optimism was further buoyed by Friday's unexpected employment data, which helped to allay fears of a looming recession in the world's largest economy.

The report showed that nonfarm payroll employment rose by 139,000 last month after a cumulative decline of 95,000 in the previous two months. The unemployment rate held steady at 4.2% and wage growth accelerated. The data helped allay fears of a rapid decline in labor demand as companies face higher tariff-related costs and the prospect of slowing economic activity.

Stock markets rebounded after a tumultuous two-month period, with the S&P 500 index rising for the fifth week out of seven. Asian and European stock indices have risen seven times in the past eight weeks.

Obviously, the focus is now on trade talks. As noted above, on Monday, US and Chinese negotiators are set to begin a second round of trade talks, the first since Trump and Xi finally broke the deadlock. This offers a glimmer of hope that the world's two largest economies can defuse tensions over China's dominance in rare earth minerals.

Investors should maintain a risk bias as recent developments suggest we are still in the middle of the deal-making phase of Trump's trade policy. Ahead of the talks, China approved some rare earth export applications. Boeing Co. also began delivering commercial airplanes to China for the first time since early April, signaling a resumption of trade flows.

As for the technical picture of the S&P 500, the main task of buyers for today will be to overcome the nearest resistance level of $5,999. This will contribute to further growth and will also pave the way for a breakout to a new level of $6,013. No less priority task of bulls will be control over $6,030, which will strengthen the positions of buyers. In case of a downward movement amid a decline in risk appetite, buyers need to regain control of the market around $5,986. A break below this level could quickly push the trading instrument back to $5,975 and open the way to $5,962.