Trump's 'amazing' meeting with Xi, Fed rate cuts and Open AI IPO

Donald Trump meets with Xi Jingpin in South Korea, where they discuss a variety of topics including tariffs and Soybean exports - but fails to cover hot-button issues like TikTok and semiconductors. Big Tech stocks saw massive falls and dips, with Alphabet (GOOG) flying and Meta (META) plunging and the reaction to the Fed decision to cut rates continued.

For more live coverage of markets watch the full episode of Market Sunrise and head to Yahoo Finance.

Video Transcript

00:07 Speaker A

Markets are set for a mixed open. We're seeing Dow futures down around 100 points while the S&P 500 and Nasdaq are hovering lower near the flat line, but pretty much to the downside at this point, indicating an open that will be lower across the board.

00:19 Speaker A

Investors are waiting and watching to see if that more optimistic between US and China can give stocks a bit of a boost, especially after Wednesday's decline following Jerome Powell's more cautious comments on future Fed rate cuts.

00:30 Speaker A

And there's plenty more driving the agenda this morning. So let's get to the three things that you need to know, starting with that US China meeting.

00:38 Speaker A

President Trump calling his face-to-face with China's Xi Jinping amazing after the two leaders met in South Korea, their first in-person meeting of Trump's second term.

00:48 Speaker A

Trump did announce that he'll cut a 20% tariff on Chinese goods linked to Fentinel to 10%, part of what's been described as a reset in trade relations.

00:59 Speaker A

The deal also includes China extending rare earth exports for at least another year and renewing purchases of US soybeans, that would be a big boost for American farmers.

01:09 Speaker A

The President framed it as a win for both sides, saying a formal agreement could be signed pretty soon.

01:14 Speaker A

But talks over NVIDIA's access to China were left out. Trump saying that Beijing and the chip maker will work that out themselves, adding we're not talking about the Blackwell.

01:25 Speaker A

Also still unresolved, the future of TikTok and China's ties to Russia, with Trump saying the two sides agreed to work together on Ukraine.

01:32 Speaker A

Plus, investors continue to digest earnings from Alphabet, Meta, and Microsoft with AI spending still front and center.

01:40 Speaker A

But we are seeing two very different reactions here. Alphabet shares jumping over 7% in pre-market trading, while Meta is sliding nearly 9%. We'll break down why throughout the show.

01:52 Speaker A

Meanwhile, Reuters reporting that ChatGPT maker OpenAI is laying the groundwork for a 1 trillion dollar IPO as the AI boom shows no signs of slowing down.

02:01 Speaker A

This coming after the company formalized its new public benefit structure this week.

02:08 Speaker A

And finally, central banks in focus this morning. The Fed cut interest rates by another quarter point, but it wasn't a unanimous decision.

02:15 Speaker A

Two officials dissented on either side of the move and chair Powell struck a cautious tone, saying that future rate cuts are not guaranteed.

02:24 Speaker A

Overseas, the Bank of Japan held steady overnight, while the European Central Bank meets later today with markets expecting a similar outcome.

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