Nasdaq 100 Leads Wall Street Rally As China Signals Openness To Fentanyl Talks, Easing Trade Tensions

U.S. stocks powered higher Friday after signs emerged that China may be open to negotiating a resolution to the fentanyl crisis, signaling a potential softening of trade tensions with the U.S. and lifting investor sentiment.

Sources close to the Wall Street Journal revealed that Wang Xiaohong, China's minister of public security and a senior cabinet member, has been inquiring about what President Donald Trump's team expects from China regarding its role in the production of fentanyl precursors.

The inquiry marks a possible turning point in the long-standing diplomatic standoff between Washington and Beijing.

Markets Cheer Diplomatic Hopes

The S&P 500 Index jumped 1.5% to 5,685 points, on the way to its ninth straight day of gains and returning to levels last seen in late March.

Since hitting a short-term bottom in April, the SPDR S&P 500 ETF Trust (NYSE:SPY) has rallied 17.5%, showcasing the index's strong recovery and renewed investor confidence.

The Nasdaq 100 rose even more aggressively during Friday trading, climbing 1.7% and above 20,100 points, driven by surging tech stocks. The index now trades at highs last seen on March 26.

Small caps staged an even sharper rebound. The Russell 2000 index – tracked by the iShares Russell 2000 ETF (NYSE:IWM) – rallied 2.3% to 2,020 points, erasing losses incurred after the April 2 tariff announcements.

Beijing's Strategy: Leverage Fentanyl To Reset Trade Talks?

According to people familiar with the matter, China is exploring the possibility of sending Wang Xiaohong to the U.S. or arranging a high-level meeting with U.S. officials in a neutral location.

The talks are described as fluid, but one consistent thread is that Beijing is seeking reciprocal movement from Washington on tariffs, WSJ reports.

The gesture could open the door to wider negotiations. On Friday, China's Commerce Ministry shifted its tone, stating that it was considering beginning discussions with the U.S. to halt the ongoing trade war.

This marked a notable departure from its earlier stance, where it demanded that the U.S. first roll back tariffs as a precondition for any dialogue.

The thaw in rhetoric comes at a critical moment for China's economy, which is grappling with a prolonged real estate slump, falling prices and subdued business sentiment.

Tech Stocks Lead Friday’s Rally

Several large-cap tech names were at the forefront of the Nasdaq's rally. Among the top gainers:

• DexCom Inc. (NASDAQ:DXCM) soared 15% to $80.80
• AppLovin Corp. (NASDAQ:APP) gained 8.99% to $304.61
• Arm Holdings plc (NASDAQ:ARM) advanced 6.32% to $122.69
• Old Dominion Freight Line Inc. (NASDAQ:ODFL) climbed 5.84% to $159.35
• Palantir Technologies Inc. (NYSE:PLTR) rose 5.7% to $122.83

Among the worst performers were:

• Atlassian Corp. (NASDAQ:TEAM), down 6.71% to $213.69
• Take-Two Interactive Software Inc. (NASDAQ:TTWO), off 5.62% to $221.95
• Apple Inc. (NASDAQ:AAPL), slipping 4% to $204.78
• Amgen Inc. (NASDAQ:AMGN), falling 2.53% to $276.59
• MercadoLibre Inc. (NASDAQ:MELI), down 1.46% to $2,261.06

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