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US stocks experienced a rally on October 28, 2025, with the S&P 500 Index rising by 0.87%, the Dow Jones up 0.52%, and the Nasdaq 100 increasing by 1.32%. This surge followed the announcement of a tentative trade agreement between US and Chinese negotiators, which was reached during meetings in Malaysia over the weekend. The agreement is set to be finalized at a summit between Presidents Trump and Xi on October 31 in South Korea.
Treasury Secretary Bessent stated that the agreement effectively removes the threat of a 100% tariff on US imports from China set to begin on November 1. Additionally, China has agreed to purchase a “substantial” amount of US soybeans and not restrict rare earth metal exports for at least one year. The current government shutdown is expected to furlough around 640,000 federal workers, which could raise the unemployment rate to 4.7% and delay critical economic reports.
This week is pivotal as the FOMC meeting on October 28-29 is anticipated to result in a 25 basis point cut to the federal funds rate. Bloomberg estimates that 84% of the S&P 500 companies reporting have exceeded forecasts, although overall Q3 profit growth is expected to be 7.2%, marking the smallest increase in two years.
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