Volkswacht Bodensee - US-China trade talks in London hang over markets

The London negotiations, following on from a first round in Geneva last month, aim to quell renewed tariff tensions between Washington and Beijing.

New York's Dow and S&P 500 indices were lower, while the tech-heavy Nasdaq rose slightly in early trading.

Asian shares closed up on hopes of a deal, and catching up with Wall Street from Friday, when US jobs data suggested the American economy was doing well, for now.

The dollar, however, was largely unmoved, with persistent fears of higher US inflation in the pipeline from Trump's generalised tariffs weighing on it.

London, Paris and Frankfurt indices were all lower.

While the US economy was showing resilience, official data on Monday showed China's exports to the United States last month grew at a slower pace than expected, even as they picked up to the EU and Asia.

The US-China talks took place following a call between US President Donald Trump and Chinese President Xi Jinping last Thursday. They sought a de-escalation after each had accused the other of violating terms of a tariffs reprieve struck in Geneva in mid-May.

The US side in London on Monday was being led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer, while Vice Premier He Lifeng headed the Chinese team.

Their meeting was helped by news that Beijing on Saturday approved some applications for rare-earth exports, while US aviation giant Boeing is to start sending commercial jets to China for the first time since April.

Easing China's export controls on rare-earths was key for Washington, "while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers," said Kathleen Brooks, research director at XTB.

"The outcome of these discussions will be crucial for market sentiment," she said.

The dollar's weakness came as economists warned that Trump's tariffs on most of the world could reignite inflation, and as the US Federal Reserve weighs whether to lower interest rates.

"The May minutes and recent comments by several (policy board) members... suggest the Fed is highly attentive to the risk that tariffs will lead to a persistent inflation shock," wrote analysts at Bank of America.

In corporate news, entertainment giant Warner Bros. Discovery announced plans to split into two publicly traded companies, sending its share price higher by more than nine percent.

One would be a Streaming and Studios company covering film and TV production and catalogues, and the other a Global Network company with television brands including CNN and Discovery, and free-to-air channels in Europe.

US semiconductor maker Qualcomm also announced it was buying a UK firm, Alphawave, for $2.4 billion as demand for database infrastructure heated up from demand in the AI sector.

Alphawave shares in London jumped more than 22 percent on the news. Qualcomm's shares rose three percent in New York.

- Key figures at around 1335 GMT -

New York - Dow: DOWN 0.2 percent at 42,659.99 points

New York - S&P 500: DOWN 0.1 percent at 5,995.73

New York - Nasdaq Composite: UP 0.1 percent at 19,551.35

London - FTSE 100: DOWN 0.3 percent at 8,813.11

Paris - CAC 40: DOWN 0.4 percent at 7,777.74

Frankfurt - DAX: DOWN 0.7 percent at 24,126.23

Tokyo - Nikkei 225: UP 0.9 percent at 38,088.57 (close)

Hong Kong - Hang Seng Index: UP 1.6 percent at 24,181.43 (close)

Shanghai - Composite: UP 0.4 percent at 3,399.77 (close)

Euro/dollar: UNCHANGED from $1.1397 on Friday

Pound/dollar: UP at $1.3536 from $1.3529

Dollar/yen: DOWN at 144.67 yen from 144.81 yen

Euro/pound: DOWN at 84.22 pence from 84.23 pence

Brent North Sea Crude: DOWN 0.2 percent at $66.35 per barrel

West Texas Intermediate: DOWN 0.2 percent at $64.43 per barrel

S.Spengler--VB