Trump heads into a series of meetings with China’s Xi in Beijing, aiming to secure economic wins, maintain a fragile trade truce and navigate flashpoints such as the Iran war and arms sales to Taiwan.
Michael Strobaek, global chief investment officer at Lombard Odier, said preserving the status quo may be the most a meeting between Trump-Xi meeting can achieve.
“I think that, amid the uncertainties around the Middle East ceasefire, that may be enough for now,” said Strobaek, noting expectations are low and groundwork for any major diplomatic breakthroughs appears thin.
Stocks fly on AI
In stocks, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.2%, hovering near the record-high hit last week.
Japan’s Nikkei was perched at a new all-time peak with data showing AI-linked demand partly helped lift earnings for Japanese firms. Seoul’s KOSPI was 1.7% higher, taking its gains so far for 2026 to an eye-watering 88%.
SK Hynix, one of the AI darlings in Asia, is on the verge of breaking through US$1 trillion market cap, becoming the second South Korean firm after Samsung to break into the trillion dollar club. SK Hynix stock is up over 200% this year.
European futures STXEc1 pointed to a strong open while US stock futures was up 0.23%.
Analysts though caution that the elevated oil prices and the impasse in negotiations to end the war in the Middle East could bring inflationary worries back into view.
“Markets are trying to run two playbooks at once: AI and earnings says buy growth, but geopolitics and energy priced are quietly re-writing the inflation trajectory in the background,” said Charu Chanana, chief investment strategist at Saxo.
“While today’s session may still follow the AI momentum, a macro reality check remains likely from the Trump-Xi meeting.”
Brent crude futures were little changed at US$105.76 a barrel in early trading, while US West Texas Intermediate futures fetched US$101.14 per barrel . Oil prices remain well above the pre-war levels, fanning inflation worries worldwide.
Dollar gets a lift from inflation data
In currencies, the US dollar was firmer as investors wagered the Federal Reserve’s next rate move would be a hike after hotter-than-anticipated inflation reports this week.
US producer prices posted their biggest gain since early 2022, following Tuesday’s consumer price data that showed annual inflation rose at its fastest pace in three years.
Higher inflation and stronger labour market data have led some traders to price in the prospect of a potential rate hike in the first half of next year even as many economists and analysts continue to see a rate cut as the likely next move by the US central bank.
The euro bought US$1.1716, near its lowest in a week. Sterling was at US$1.35282, leaving the dollar index, which measures the US currency against six others, at 98.458 in early trading.
The yen fetched 157.88 per US dollar, keeping traders wary of fresh Tokyo intervention after recent sharp spikes that sources say were driven by officials stepping in to prop up the battered currency.
The two-year yield was at 3.9708%, down 1.9 basis points but near the 1-1/2-month high it hit in the previous session. The benchmark 10-year yield stood at 4.4629%, having touched close to a one-year high on Wednesday.