S&P 500: U.S.-China Trade Talks Raise Rare-Earth Risks for Nvidia and Broadcom

U.S.-China Trade Talks Put Key Stocks and Sectors on Edge

Trade negotiators from the U.S. and China have gathered in London for high-stakes talks, with traders closely watching for outcomes that could rattle supply chains and weigh on key sectors. The focus is shifting from tariffs to export controls—especially rare-earth minerals critical to tech and defense. Stock futures were steady early Monday, but the broader market remains alert.

Rare-Earth Minerals at the Center of U.S. Demands

The U.S. wants China to resume and speed up rare-earth exports—materials used in everything from semiconductors to fighter jets. Although China made a goodwill gesture by approving some export licenses, delays have raised concerns in Washington. In response, the U.S. has started revoking licenses that allowed American firms to export key items to China, such as jet engine components and chipmaking software.

This tit-for-tat approach increases pressure on companies like Nvidia (NVDA), Intel (INTC), Lockheed Martin (LMT), and General Electric (GE)—all of which depend on stable flows of critical parts and materials. If the talks stall, expect ripple effects across these names.

Biggest Drop in Chinese Exports to U.S. Since 2020

New trade data shows Chinese shipments to the U.S. dropped 35% year-over-year in May—the largest decline since Covid lockdowns in 2020. The drop followed a 21% fall in April and suggests that the tariff pause hasn’t restored trade flows. Some of the lost volume has been redirected to Southeast Asia and the EU, but U.S. importers remain exposed to delays and higher freight costs.

For retail and industrial supply chains, this means added volatility. Freight bookings and container prices have spiked since last month’s temporary truce, and executives remain cautious about committing to long-term orders.

Tech, Industrials, and Materials Sectors in Focus

Industrials and tech stocks are most at risk if talks break down. Chipmakers and aerospace firms, in particular, are facing uncertainty tied to rare-earth access. Shares of Intel, Broadcom (AVGO), Boeing (BA), and Raytheon (RTX) may come under pressure.

Materials and energy companies could also feel the strain. China’s restricted access to U.S. ethane—a key input in plastics—could affect pricing and demand for U.S. chemical giants like Dow Inc. (DOW) and LyondellBasell (LYB).

Market Forecast: Cautious Outlook on Export-Exposed Stocks

With the S&P 500 still holding above 6000, the broad market isn’t flashing panic—yet. But traders should take a defensive stance on names closely tied to international trade.

Until there’s clear progress in London, expect increased volatility in semiconductors, industrials, and materials. A deal could lift sentiment quickly, but breakdowns would likely drive short-term selling. Stay nimble and alert to headline risk this week.

More Information in our Economic Calendar.