U.S. stocks held steady Tuesday as a second day of trade talks between the U.S. and China got underway in London. 

The Dow Jones Industrial Average gained 0.25%, or 105.11 points whille the S&P 500 gained 0.55%. The Nasdaq index outperformed with a 0.63% gain and is now approximately 285 points away from reclaiming the 20,000 leve.

Commerce Secretary Howard Lutnick described U.S. – China trade negotiations as going “really, really well,” suggesting a resolution may be close. Export controls remain central to discussions. U.S. officials are seeking Beijing’s release of rare earth materials, while China is pressing for eased access to American semiconductors.

Still, the mood was cautious on Wall Street, where investors are watching closely for signs of a breakthrough. Chinese markets, meanwhile, showed renewed volatility, with a sudden dip in equities early Tuesday reflecting investor nerves.

Markets have been sensitive to signals from the talks. Despite optimism from officials, President Trump warned Monday that “China’s not easy,” tempering expectations.

U.S. small-business sentiment

On the economic front, a survey from the National Federation of Independent Business showed a modest rebound in U.S. small-business sentiment in May, the first uptick since September. 

The improvement was linked to easing tariff concerns and anticipation around Trump’s tax-and-spending bill, though some firms remained wary about the broader outlook.

The World Bank, however, lowered its U.S. growth forecast to 1.4% for 2025, citing ongoing trade uncertainty.

Elsewhere, Blackstone announced plans to invest up to $500 billion in Europe over the next decade, citing expectations of accelerating growth in the region.

Investors are also bracing for Wednesday’s release of the May Consumer Price Index report, which could reshape expectations for inflation and future Fed policy. Analysts anticipate an uptick in price pressures.