Wall Street opened Thursday on a cautiously optimistic note following reports of a phone call between U.S. President Donald Trump and Chinese President Xi Jinping. The conversation, which comes amid renewed trade friction, momentarily boosted sentiment across major indexes, including the Dow Jones Industrial Average. However, early gains quickly faded as traders weighed fresh economic data and broader concerns about global growth.
Dow Opens Higher, Then Pulls Back
After snapping a five-day winning streak on June 4, the Dow opened in positive territory but dipped slightly within the first hour of trading. The initial rally was sparked by news from Chinese state media outlet Xinhua, which confirmed that President Trump and President Xi had spoken by phone. This marks the first direct communication between the two leaders since Trump recently accused China of violating the terms of a new trade agreement.
Market optimism around U.S.-China relations has been volatile in recent months. In April, equities rallied following diplomatic progress made during trade negotiations in Switzerland. However, with tensions flaring again, Thursday’s call served as a hopeful signal that diplomatic lines remain open.
Bitcoin Holds Steady as Equities Waver
While traditional markets digested geopolitical developments, Bitcoin (BTC) hovered just above $105,000, maintaining its strong position amid broader macro uncertainty. This relative stability reflects Bitcoin’s growing status as a non-correlated asset and its potential role as a hedge against fiat currency risk and monetary tightening.
Weak Job Data Dampens Optimism
Despite initial enthusiasm, investor sentiment was tempered by fresh signs of economic strain. The U.S. Labor Department reported a second consecutive weekly increase in jobless claims, with 247,000 Americans filing for unemployment benefits an 8,000 rise from the previous week. This marked the highest weekly jump since October 2024 and exceeded economist expectations of 237,000 claims.
Compounding labor market concerns, the Bureau of Labor Statistics revealed that nonfarm productivity declined at an annualized rate of 1.5% during the first quarter of 2025. Rising unit labor costs, up 6.6%, suggest that businesses are facing increased wage pressures amid sluggish output an environment complicated further by ongoing tariff uncertainty.
ECB Cuts Rates Again as Global Policies Diverge
In Europe, the European Central Bank (ECB) announced its seventh consecutive interest rate cut, reducing its deposit facility rate by 25 basis points to 2%. The decision follows eurozone inflation data that showed a cooling to 1.9% in May just under the ECB’s 2% target. The steady easing of monetary policy signals the ECB’s continued commitment to stimulating economic growth across the euro area, even as central banks in other regions maintain tighter stances.
Meanwhile, U.S. President Trump has voiced frustration with Federal Reserve Chair Jerome Powell over the Fed’s reluctance to lower interest rates. This tension underscores the diverging approaches to monetary policy globally and adds another layer of uncertainty to markets already grappling with geopolitical and economic challenges.
Thursday’s trading session highlighted the fragile balance in financial markets, where political developments, central bank decisions, and economic data can quickly shift investor outlooks. While the Trump-Xi phone call offered a momentary boost, weak job data and global economic headwinds reminded markets that volatility remains the norm. As Wall Street looks toward the end of the week, investors will be watching closely for further signals on trade, employment, and monetary policy to gauge the direction of risk assets in the coming weeks.
