Trump–Xi Showdown in South Korea: The Trade Truce That Could Make—or Break—the Year-End Market Rally

It’s a big week for the markets, and the focal point may well be this historic summit. Donald Trump and Xi Jinping are set to meet Thursday (South Korea time) — which is Wednesday evening to Thursday morning ET depending on exactly when the meeting begins in Busan. In the context of a week that includes results from five of the “Mag 7” hyperscalers and a key Federal Reserve policy decision, the trade talks stand out as the most meaningful wildcard for a year-end rally given the breadth of potential ripple effects. Over the weekend, both sides offered optimistic commentary — U.S. Treasury Secretary Scott Bessent called the framework “very successful,” while Chinese officials described the negotiations as having reached “basic consensus.” All signs point to positive momentum — but precisely because expectations are elevated, any perceived slight or missed nuance could trigger market jitters.

What’s on the table

According to people familiar with the talks, China is expected to commit to stepped-up controls on the export of fentanyl-precursor chemicals, which would allow the U.S. to slash its roughly 20% tariff on Chinese goods tied to fentanyl by as much as 10 percentage points. Simultaneously, Beijing may resume larger purchases of American soybeans, while the U.S. would hold off on further rare-earth export restrictions and higher tariffs threatened earlier this year. (Sources: multiple press reports). For investors that means multiple sectors and names could react: U.S. agricultural firms (e.g., Archer Daniels Midland Company ADM, Bunge Limited BG) could benefit from renewed Chinese purchases; chemical companies tied to precursor-chemical exports (or restrictions) and rare-earth firms/traders (e.g., MP Materials Corporation MP) could see a direct linkage; and broader industrial and technology stocks sensitive to supply-chain risk (e.g., Tesla, Inc. TSLA, Apple Inc. AAPL) may respond to changes in rare‐earth/critical‐minerals regime.

What would be viewed as a positive outcome

• A clear statement of intent from both sides that tariff escalation is averted and further large-scale tariff hikes (such as the previously threatened 100 % tariff on Chinese goods) are off the table for now.
• Commitments from China to resume U.S. soybean purchases and other U.S. agricultural exports — which would be broadly positive for U.S. farmers and related equities.
• A pledge by Beijing to delay or moderate rare-earth mineral export controls, thereby alleviating supply-chain pressure on U.S. tech/EV firms reliant on those materials.
• A firm timetable or agreement around TikTok’s U.S. operations, as referenced by Bessent over the weekend, which would reduce one large political overhang.
• Explicit language about fentanyl-precursor chemical export restrictions, which markets may interpret as a “win‐win” (public health + trade relief).

What could be a negative or market-souring outcome

• Murky language, delays or “framework only” status without clear timelines — the market hates ambiguity when expectations are high.
• Any hint that China balks on rare‐earth controls, or that the U.S. demands a heavier price (which could be interpreted as ongoing escalation).
• Absence of meaningful agricultural purchase commitments; or lack of movement on the fentanyl/pre‐cursor chemical front.
• A statement that reserves the right for future tariff expansions or export controls — which could be seen as “war kept on standby,” rather than resolved.
• Leaked commentary or media reports ahead of the summit that skew negative (e.g., disagreements, last-minute bargaining spats) — because the tail risk is asymmetric.

Why this meeting matters for the rally

With the major tech-earnings (Mag 7/hyperscalers) expected to deliver good but largely anticipated results, and the Fed widely expected to announce a 25 bps rate cut, those two events may be necessary but not sufficient for a sustained year-end rally. The trade summit introduces structural upside (or risk) across multiple global sectors at once. A successful deal can unlock not just tech upside but agricultural capital flows, renewed commodity demand, supply-chain relief for industrials/EVs, and risk appetite in emerging markets. Conversely, a misstep could reverse recent optimism just as markets are positioned for a bid.

Timing and logistics

The meeting is slated for Thursday in Busan, South Korea. In Eastern Time (ET), that translates roughly to Wednesday evening (Oct. 29) into Thursday early morning (Oct. 30) depending on local start time. Traders should monitor news wires starting Wednesday around 8pm-10pm ET, and again on Thursday morning for follow-up commentary and leaks.

What to watch closely

• Key quotes from Trump and Xi — look for words like “agreement,” “framework,” “deliverables,” and any mention of “tariff rollback,” “soybeans,” “rare-earths,” or “fentanyl exports.”
• Timing of follow-on negotiations — markets want commitments not just statements; “final details to be worked out” may disappoint.
• Reaction of specific sectors: Soy/Agriculture futures, Rare‐Earths/minerals miners, EV/tech supply‐chain names, U.S. tariff‐sensitive manufacturers.
• Whether the U.S. or China explicitly reserves the right to reimpose measures; even a “stand-still for one year” can be seen as weakened outcome.
• Market sentiment flow: If the tech earnings go well and the Fed cut comes as expected, but the trade deal falters, that may mute the rally or flip risk appetite.

In short: the markets are expecting the tech giants to do their part this week, and the Fed to deliver its pivot. What’s less certain — and perhaps more consequential — is whether Trump-Xi trade talks deliver a structural positive (or at least remove a large overhang). If they do, it could be the “green light” for a year-end rally. If not, the gains could stall or reverse. As quoted by Mary Lovely of the Peterson Institute: “This is a cease-fire, not disarmament.” Investors should treat the summit as a high-stakes tie decision in a market already leaning bullish.