As the market reacted to vague but optimistic signals from the U.S.-China trade talks, stock futures rose while cryptocurrency prices fell.
In short
U.S. officials stated that trade talks with China have made 'substantial progress,' but no details were provided.
In April, China's consumer prices fell for the third consecutive month, highlighting economic weakness.
Bitcoin and Ether fell alongside altcoins due to market caution and outflows from ETFs.
After the White House stated that significant progress had been made in trade talks with China, U.S. stock index futures rose on Sunday evening, but cryptocurrency prices fell due to a lack of details and broader risk reallocation.
After U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamison Greer described the two-day talks in Switzerland as 'productive' and 'constructive,' Dow futures rose by 1.3%, while S&P 500 and Nasdaq 100 futures increased by 1.4% and 1.6%, respectively.
"We have made substantial progress in the very important trade talks between the U.S. and China," Bessent said on Sunday after a closed-door meeting with China's Vice Premier and two deputy ministers. "We will announce details tomorrow, but I can tell you that the negotiations have been productive."
Greer noted that the speed of negotiations indicates that the differences are smaller than previously thought. 'It's important to understand how quickly we can reach an agreement,' he said.
He also elaborated on the talks against the backdrop of a $1.2 trillion trade deficit with the U.S., stating that the outcome of the talks is a step towards addressing the 'national emergency' previously declared by President Trump.
As of mid-May, the U.S. maintains a 145% tariff on most Chinese imports, while China imposes tariffs of up to 125% on U.S. goods.
These restrictions were initially imposed due to trade imbalances and national security issues, including the opioid crisis.
In any case, comments from Bessent and Greer over the weekend indicate that China is willing to return to the negotiating table, which may also reflect increasing domestic pressure in China.
Data released on Saturday showed that China's consumer prices fell by 0.1% year-on-year in April, marking the third consecutive month of deflation, highlighting weak demand and raising expectations for further stimulus measures from the People's Bank of China.
Despite the optimistic remarks on Sunday, no specific details regarding tariffs, timelines, or enforcement mechanisms were disclosed. This ambiguity has put pressure on the cryptocurrency market.
Bitcoin fell 0.6% to $103,900, and Ether dropped 2.9% to $2,507. Data from CoinGecko shows that altcoins, including Solana, Dogecoin, and XRP, fell between 4% and 8% amid significant liquidations and outflows from ETFs.
The White House is expected to issue a joint statement on Monday, providing more details about the talks and the extent of progress made over the weekend.