Dow Jones gains 142 points as Trump claims China trade deal is ‘done’

Donald Trump also renewed pressure on the Federal Reserve to cut interest rates following Wednesday’s lower-than-expected inflation data. 

U.S. markets gained on Wednesday as ongoing Washington – Beijing trade talks are showing signs of progress while economic data releases point to a healthy economy. The Dow Jones Industrial Average gained 142 poinots or around 0.3%, trailing the Nasdaq index which was up around 0.4%.

In a Truth Social post, Trump called the May Consumer Price Index  “great numbers” and demanded a full percentage point rate cut, arguing it would reduce federal interest payments.

“CPI just out. Great numbers! Fed should lower one full point. Would pay much less interest on debt coming due. So important!!!” Trump wrote in all caps.

The CPI rose 2.4% year-over-year in May, slightly below the 2.5% forecast, while core CPI—which excludes food and energy—climbed 2.8%, matching April’s pace. 

Monthly increases also came in soft, with both headline and core CPI rising just 0.1%, missing expectations.

A rate cut typically weakens the U.S. dollar and lowers yields on traditional assets, making riskier investments like crypto more attractive. It also boosts liquidity in the financial system, which can drive more capital into digital assets.

The data reinforced expectations that inflation continues to cool, raising speculation about potential rate cuts by the Fed later this year. However, the central bank has signaled caution, emphasizing the need for sustained disinflation before easing.

China – U.S. trade update

President Trump also announced that a U.S.-China trade deal is “done,” following two days of negotiations in London that produced a tentative “framework deal” to ease tensions between the two economies. 

The agreement still requires formal approval from both Trump and Chinese President Xi Jinping before it can prevent the return of steep tariffs scheduled for July 9. 

Tensions had escalated after the May Geneva talks, with China slashing rare earth exports and the U.S. targeting Chinese students linked to the Communist Party. Details of the new deal remain unclear, but both sides have signaled progress.