(Bloomberg) -- S&P 500 futures were little changed as investors weighed the potential outcomes of a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing. The index is projected to move about 0.7% in Thursday's session, according to data from Piper Sandler, reflecting a cautious stance from traders.
“With call volumes hovering near records, anything that isn’t positive for technology and AI shares related to trade relations between the US and China — or renewed Middle East tensions in Iran — would be perceived poorly by investors,” said Danny Kirsch, head of options at Piper Sandler. Any fresh trade-war threats may spark equity selling, he added.
The meeting has brought several key sectors into sharp focus. Semiconductor stocks like Nvidia Corp., which rose 2.7% after its CEO was announced as a last-minute addition to the U.S. delegation, are being closely watched. The aerospace sector is also on alert, with reports that China is considering a deal for about 500 Boeing 737 Max aircraft. Agriculture stocks such as Deere & Co. could also see volatility, with traders reporting discussions around Chinese purchases of U.S. crops.
The summit addresses what President Xi termed "historical questions" about the future of the U.S.-China relationship, including whether the two powers can avoid the "Thucydides Trap." For investors, the more immediate question is whether the talks will de-escalate trade tensions or introduce new risks to a market trading at record valuations.
Investors are monitoring several sectors for immediate reaction to any announcements from the summit.
Semiconductors: The industry is a key battleground in U.S.-China trade relations. China's access to artificial intelligence chips is a major point of contention. While Nvidia has secured licenses to sell some less-advanced processors to China, the broader outlook remains uncertain. Any deal that changes the demand prospects for the chip industry could have a significant market impact.
Aerospace: A potential order for Boeing planes would be a major boon for the company and its suppliers, including General Electric Co. and RTX Corp. Boeing's CEO Kelly Ortberg, who is attending the summit, has called the visit a "meaningful opportunity."
Agriculture: American farmers are hoping for a commitment from China to purchase U.S. agricultural products. Companies like Deere & Co. and Corteva Inc. are poised to benefit from any positive news on this front.
Critical Minerals: China's dominance in the rare earth metals market has been a source of concern for the U.S. An agreement on the flow of these metals could impact companies like MP Materials Corp., which has been positioned as a U.S. champion in the sector.
This article is for informational purposes only and does not constitute investment advice.
