Pulse
U.S.-China Extend Trade Truce as Xi Begins State Visit
Sep 24, 2026 · 5 min read
Washington and Beijing extended their trade truce by two months. Higher U.S. long-term yields pressured global risk appetite, while Mexico held rates at 6.50%.
September 25, 2026 · 5 min read · TradingWizard AI
U.S.-China Trade Truce Extended as Bond Yields Surge
| Event | Affected Assets | Likely Volatility | What Traders Should Watch |
|---|---|---|---|
| U.S.-China trade truce extension | $FXI, $KWEB, $SPY | Medium | Tariff language, implementation dates, and Chinese equity follow-through |
| Long-dated U.S. yield surge | $TLT, $QQQ, $EEM | High | Treasury curve steepening, real yields, and growth-stock valuation pressure |
| Bank of Mexico rate hold | $USDMXN, $EWW | Medium | Forward-guidance interpretation and peso reaction around recent ranges |
| U.S. durable-goods and sentiment data | $DXY, $TLT, $SPY | High | Headline revisions, inflation expectations, and rate-path repricing |
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<h3>U.S.-China Trade Truce Extended by Two Months</h3>
<p>The United States and China extended their trade truce for two months following the Trump-Xi summit. The extension delays immediate tariff escalation and reduces the near-term policy risk premium for Chinese equities, U.S. multinationals, and global supply chains. The agreement does not remove longer-term trade risk, according to the <a href="https://www.usnews.com/news/top-news/articles/2026-09-24/four-takeaways-from-trumps-summit-with-xi-in-washington">Reuters summit report</a>.</p>
<p><strong>Key Assets to Watch:</strong> $FXI and $KWEB will react to changes in China risk premiums, while $SPY will track the effect on large U.S. companies with material Chinese revenue exposure.</p>
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<h3>Long-Dated U.S. Yields Hit Two-Decade Highs</h3>
<p>Longer-dated U.S. Treasury yields reached their highest levels in roughly two decades. Asian equities remained comparatively stable, but higher discount rates continued to pressure duration-sensitive assets. Oil also retreated slightly as traders balanced growth expectations against tighter financial conditions, according to <a href="https://www.msn.com/en-us/money/economy/asian-stocks-weather-bond-storm-oil-retreats-slightly/ar-AA2cW9mM">Reuters market coverage</a>.</p>
<p><strong>Key Assets to Watch:</strong> $TLT will weaken if long yields continue rising, while $QQQ and $EEM will face valuation pressure from higher discount rates and tighter dollar liquidity.</p>
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<h3>Bank of Mexico Holds Rates at 6.50%</h3>
<p>Bank of Mexico held its benchmark interest rate at 6.50% and changed its forward guidance. The rate decision was expected to shift attention toward the projected timing and scale of future easing. The exact guidance language will determine whether markets price a slower or faster cutting cycle, as reported by <a href="https://money.usnews.com/investing/news/articles/2026-09-24/bank-of-mexico-keeps-rates-on-hold-tweaks-its-forward-guidance">Reuters</a>.</p>
<p><strong>Key Assets to Watch:</strong> $USDMXN will react to changes in Mexico's expected yield advantage, while $EWW will track the effect of domestic financing costs on Mexican equities.</p>
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<h3>U.S. Durable-Goods and Sentiment Data Move Into Focus</h3>
<p>U.S. durable-goods orders and final Michigan consumer-sentiment data are the next scheduled macro catalysts. Durable-goods data will test business-investment momentum. Michigan inflation expectations could have a larger rates impact than the headline sentiment reading, based on the <a href="https://www.marketpulse.com/tools/economic-calendar/">MarketPulse economic calendar</a>.</p>
<p><strong>Key Assets to Watch:</strong> $DXY will react to changes in relative rate expectations, $TLT will track inflation and growth repricing, and $SPY will respond to the combined earnings and discount-rate implications.</p>
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| Signal | Confirmation | Risk Control | Execution Note |
|---|---|---|---|
| Chinese equities gap higher after the truce extension | $FXI and $KWEB hold above the opening range with rising volume | Place invalidation below the opening-range low | Avoid chasing an unconfirmed opening gap |
| Long Treasury yields continue rising | $TLT breaks support while $QQQ underperforms $SPY | Reduce duration exposure and cap position size | Wait for bond and equity signals to align |
| Bank of Mexico guidance is interpreted as hawkish | $USDMXN rejects resistance and closes below intraday support | Use the guidance-day high as invalidation | Confirm the move is not driven only by broad dollar weakness |
| U.S. data exceeds expectations | $DXY rises while $TLT falls and front-end yields increase | Wait for the first volatility spike to settle | Trade the confirmed rates response, not the headline alone |
| U.S. data misses expectations | $TLT rises while $DXY loses intraday support | Set stops beyond the post-release range | Check whether weaker growth outweighs lower-rate support for equities |
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