US OPEN: Risk appetite spikes amid US-China trade truce hopes (27.10.2025)

The stock rally in the US reignites, as hopes around US-China trade talks trigger a new wave of risk appetite on Wall Street. Nasdaq futures lead gains (US100: +0.6%), followed by a general optimism visible in the S&P 500 (US500: +0.2%). On the other hand, US2000 and US30 trade in the red (-0.6% and -0.1% respectively), with key defensive stocks like Procter and Gamble (PG.US: -1.1%)  and Walmart (WMT.US: -0.9%) weighing on the performance of Dow Jones Industrial Average.

The trade optimism raised as the advances in US-China talks in Malaysia produced a “positive environment” and basic agreements, suggesting both sides are open to compromise. Treasury Secretary Bessent indicated Trump’s threatened 100% tariffs may not take effect, easing fears of an immediate escalation in the trade war. Markets view this as a potential deescalation, creating a window for negotiations that could stabilize trade tensions, which fuels short-term investor confidence.

The S&P 500’s IT sector is the biggest beneficiary of the recent surge in risk appetite, while defensive sectors like Health Care and Consumer Staples face pressure. Meanwhile, expectations of a U.S.-China trade truce are weighing on U.S.-listed rare earth stocks, as investors anticipate a delay in China’s rare earth export restrictions.

Performance of S&P 500 sectors. Source: Bloomberg Finance LP

US100 (H4)

Nasdaq 100 futures opened higher today, gaining another 0.6%. The RSI has moved into overbought territory, but optimism around US-China trade talks and upcoming key Big Tech earnings could drive prices even higher. The contract is trading well above its recent resistance at 25,375, meaning any pullback would likely first test the 10-period EMA on the H4 chart.

Source: xStation5

Company news:

• Shares of US-listed rare earth miners tumbled Monday after U.S. officials signaled China may delay imposing export controls on critical minerals under a potential trade deal. Critical Metals dropped 17%, USA Rare Earth 12%, MP Materials 7.3%, and Trilogy Metals 15%.

• Avidity Biosciences surges 40% after Novartis announced that it will acquire the company for $12 billion, paying $72 per share in cash, i.e. a 46% premium. The deal, expected to close in H1 2026, strengthens Novartis’ RNA therapeutics portfolio targeting muscle tissue. The acquisition boosts Novartis’ 2024–2029 sales CAGR forecast to 6%. Avidity shares have gained nearly 70% YTD, while Novartis continues expanding U.S. R&D and cardiovascular pipeline investments.

• GameStop shares are up 1.7% after the White House reposted the retailer’s playful announcement ending the “console wars.” The move follows Microsoft’s plan to release a Halo remake on PlayStation 5 in 2026, breaking its historical Xbox exclusivity. GameStop positioned itself as a neutral gaming hub, highlighting changing industry dynamics as exclusives lose their role in driving console sales.

• Grindr drops 4.7% despite premarket gains after it received a non-binding $18-per-share buyout offer from major shareholders James Lu and Raymond Zage, valuing the dating app at $3.7 billion—a 51% premium. The deal would take Grindr private, backed by $1 billion in debt and $100 million in new equity

• Huntington Bancshares agreed to acquire Cadence Bank in an all-stock deal valued at $7.4 billion, creating a top-ten U.S. bank with $276 billion in assets and $220 billion in deposits. The merger expands Huntington’s footprint to 21 states, including Texas, and boosts its ROTCE target to 18–19%. Cadence shares rose 4%, while Huntington fell 2.7%.

• JPMorgan Chase invested $75 million in Perpetua Resources, marking the first deal under its $10 billion Security and Resiliency Initiative. The move supports development of Idaho’s Stibnite Gold Project, the U.S.’s only antimony reserve and a key gold producer. Perpetua shares rose about 5% premarket. JPMorgan’s stake equals 2.7%, joining funding from Agnico Eagle and the U.S. Defense Department.

• Keurig Dr Pepper adds 7% after it reported Q3 earnings of $0.54 per share, matching estimates, with revenues of $4.31 billion, beating forecasts by 4%. While EPS showed modest growth from $0.51 a year ago, the stock has lagged the S&P 500, down 15.4% YTD. U.S. beverage sales rose 14.4%, coffee sales 1.5%. The company raised its full-year sales forecast to high-single-digit growth and secured $7 billion in financing for its $18 billion JDE Peet’s acquisition, easing investor debt concerns.

• Qualcomm shares surged 15% as the company entered the data center AI market with its new AI200 and AI250 chips and rack-scale servers. Designed for AI inference with low power consumption, the chips directly compete with Nvidia and AMD. AI200 launches in 2026, AI250 in 2027, offering 10x memory bandwidth. Customers can buy individual chips or full servers, positioning Qualcomm as both a rival and potential partner in the multibillion-dollar data center space.