Wall Street followed the FTSE 100 (^FTSE) lower on Thursday as traders digested the next tranche of Big Tech earnings, after a mixed set of results from members of the Mag 7, as well as a new trade deal between US president Donald Trump and his Chinese counterpart Xi Jinping.
The two leaders met in Busan in South Korea on Thursday, with Trump agreeing to reduce tariffs on China from 57% to 47% in a one-year deal. This was in exchange for Beijing resuming purchases of US soybeans, the continuation of rare earth exports and a crackdown on the trade of fentanyl.
Trump characterised his discussions with Xi as “fantastic”, emphasising a “great relationship” between the two leaders, while premier Xi noted that both parties had achieved “a basic consensus” despite ongoing differences.
Furthermore, the leaders agreed to collaborate on issues concerning Ukraine and stated their intention to eliminate shipping tariffs and fees.
Today marked the first face-to-face meeting between the two since Trump returned to the White House in January, with Trump stating that he will visit Beijing in April.
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“On a scale of one to 10, the meeting with Xi was 12,” he told reporters on route back to the US.
It came as Meta (META) sank 12% after a tax hit and higher operating expenses and AI investments spooked investors. It reported revenue that beat estimates, but its third quarter earnings per share fell short of expectations due to a one-time, tax-related charge.
The firm said it was not planning to slow down capital expenditures. The company is targeting $70bn to $72bn in investments in 2025, compared to its prior outlook of $66bn to $72bn.
After the closing bell in New York, investors will be braced for quarterly results from tech megacaps Apple (AAPL) and Amazon (AMZN).
Elsewhere, the European Central Bank (ECB) left interest rates unchanged for the third time in a row on Thursday, as widely expected, as the eurozone economy proves resilient to tariff shocks with low inflation and steady growth. The main policy remained at 2%, while its deposit rate was on hold at 2.15%.
The central bank has cut rates by a combined two percentage points in the year to June, and had eight rate cuts since mid-2024, but has been on hold since as inflation is around target. Financial markets are betting on an extended pause well into 2026.
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London’s benchmark index (^FTSE) was flat by the end of the session
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Germany’s DAX (^GDAXI) was marginally higher, up 0.05% and the CAC (^FCHI) in Paris was 0.7% down
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The pan-European STOXX 600 (^STOXX) was down 0.1%
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The Dow Jones Industrial Average (^DJI) gained 0.6% after an initial dip. The broad benchmark S&P 500 (^GSPC) lost more than 0.5% before paring losses to 0.2%. The tech-heavy Nasdaq Composite (^IXIC) fell by more than 0.9%, leading the way down amid a healthy decline in Meta (META) shares.
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The pound was 0.3% down against the US dollar (GBPUSD=X) at 1.3150