The meeting is undoubtedly the economic highlight of the summit, held in Osaka, Japan, on Friday and Saturday. Investors hope that the presidents will move toward resolving a trade dispute that has raised business costs and weighed on global financial markets.
Trump has said he was prepared to place tariffs on $300 billion more in Chinese imports, covering everything China ships to the United States, if the talks with Xi don't end in progress. "The Chinese economy's going down the tubes," he said in an interview with Fox Business Network on Wednesday. "They want to make a deal more than I do."
The South China Morning Post, a Hong Kong newspaper, reported Thursday that the fresh tariffs were expected to be delayed, citing sources in Beijing and Washington. On Wednesday, U.S. Treasury Secretary Steven Mnuchin told CNBC that the two nations "were about 90% of the way there" with a trade deal. American and Chinese negotiators have completed 11 rounds of trade talks with no agreement.
Stephen Innes of Vanguard Markets believes the upcoming talks will be a "formality at best." "Although Mnuchin suggested we are 90% there to a trade deal, that reaming 10% has always been the gap too far to bridge — especially that trust gap where the U.S. wants to keep existing tariffs in place to ensure China compliance," he added.
Wall Street made early gains Wednesday on optimism over the talks. But the rally fizzled and most major benchmarks were lower at the closing bell. The S&P 500 index eased 0.1% to 2,913.78 and the Dow Jones Industrial Average shed less than 0.1% to 26,536.82. The Nasdaq composite added 0.3% to 7,909.97 while the Russell 2000 index of smaller company stocks slipped 0.2% to 1,517.78.
ENERGY: Benchmark U.S. crude lost 26 cents to $59.12 a barrel. It picked up $1.55 to settle at $59.38 a barrel on Wednesday. Brent crude oil, the international standard, shed 28 cents to $65.41 a barrel. The contract gained $1.41 to $65.69 a barrel in the previous session.
CURRENCIES: The dollar rose to 108.09 yen from 107.79 yen late Wednesday. The euro weakened to $1.1356 from $1.1371.