Pavlovian Bidding Up Of Equities

US and European equities rose buoyed by news of a potential meeting between Presidents Trump and Xi. This market reaction is attributed to hopes of a trade détente extension, despite ongoing accusations of treaty violations from both sides. President Trump's optimism may stem from a perceived bargaining advantage rather than genuine cooperation. Recent US-Australia collaboration on rare earths was met with disapproval from Beijing, which is simultaneously emphasizing self-reliance in its new five-year plan. Higher oil prices, influenced by fresh US sanctions on Russian energy firms and political developments in the Middle East, contributed to rising inflation breakevens. Chinese and Indian energy companies are reportedly reducing Russian oil purchases to avoid secondary sanctions, while trade talks between the US and India hint at similar shifts. Explosions at refineries in Hungary and Romania also impacted European gasoil futures. Vladimir Putin condemned the sanctions as detrimental to Russia's war economy. In corporate news, Ford reported a significant quarterly profit increase driven by SUV demand but downgraded future guidance due to supply chain issues and tariffs. Tesla also showed strong topline growth but faced profit pressure from R&D spending. These automaker results suggest resilient US durable goods consumption and potentially less severe tariff impacts than anticipated. Investors await US CPI figures, which are expected to show accelerated inflation, yet the market still anticipates further Federal Reserve rate cuts.