Trump-Xi Washington Summit Spurs S&P 500 Best Day Since August as Trade Talks Enter Second Day

Presidents Donald Trump and Xi Jinping are set to meet at the White House this week for their second face-to-face summit of 2026, with U.S. and Chinese officials holding a second day of preparatory trade talks in New York on Monday focused on artificial intelligence, investment and implementing agreements reached by lead negotiators ahead of the meeting. Treasury Secretary Scott Bessent met with Chinese Vice Premier He Lifeng at JPMorgan Chase headquarters in New York on September 20, laying the groundwork for the summit.

Markets responded sharply to optimism surrounding the meeting. The S&P 500 gained 1.49% to close at 7,764.70 on Monday, its best session since August 4, while the Nasdaq 100 surged 2.8% for its biggest single-day gain since that date, buoyed by a rally in AI and technology stocks. The Dow Jones Industrial Average added 366 points, or 0.71%, closing at its own strong level. Crude oil fell $4.81 per barrel on the session, and the U.S. dollar index rose $0.255.

Cotton futures also rallied sharply, gaining 110 to 247 points across contracts, with front months leading the move. Weekly crop progress data showed 65% of the U.S. cotton crop with bolls open.

Key issues on the summit agenda include tariffs, artificial intelligence, critical minerals and China's economic support for Iran. The U.S. has stressed its backing for Japan, South Korea and Taiwan ahead of the talks. Some analysts argue the summit is unlikely to break the broader U.S.-China stalemate, and the top U.S. priority heading in is described as securing no further Chinese assistance for Iran. Separately, the Trump administration has put forward a proposal, reported at between $5 billion and $10 billion depending on the source, to help rebuild energy infrastructure in the Middle East damaged during the ongoing seven-month conflict with Iran, with regional partners expected to co-invest.