By The S&P 500 Index will likely be highly volatile this week as investors watch the rising geopolitical tensions and the upcoming Trump-Xi summit in Washington. This article looks at some of the top constituent companies that may be affected during the meeting.
Boeing in the spotlight amid a possible large order
Boeing will be a top S&P 500 stock to watch as Trump and Xi Jinping meet because of a possible large order. Chinese airlines made a 200-jet order during Trump’s trip to China in May.
The order was much smaller than expected. And since then, there have been disagreements between the two sides, raising concerns about the future of the deal. China has insisted for assurances on long-term service contracts for the jets.
Media reports suggest that Xi plans to travel with tens or hundreds of business executives, including those of leading Chinese airlines. Most notably, there are rumors that China may boost its Boeing orders from 200 to 500, which would be bullish for the company.
Nvidia and Chinese orders
Nvidia, the biggest company in the world, will also react to the upcoming Trump-Xi meeting. Jensen Huang, the CEO, has pushed the Trump administration to allow it to sell its most advanced chips to Chinese companies.
The two sides have agreed to allow Nvidia to ship its less advanced chips, known as H200, to China. Recent reports suggest that the company has already started to sell a limited number of chips to some Chinese companies.
A decision by the two sides to allow more sales would be bullish for Nvidia. In its last results, the company said that it did not include China in its modelling for the third quarter and annual results.
General Motors and Ford
American automakers will also be in the spotlight in this meeting. The key issue is that President Trump has maintained that he will support Chinese companies setting up operations in the United States. Trump argued that the move would help to create more American jobs.
However, American auto companies have warned that allowing Chinese automakers in the country was risky. They argued that the firms will take advantage of domestic subsidies to squeeze their businesses. In a letter, the automakers said:
“We urge your administration to maintain policies that keep the door firmly shut to Chinese automakers seeking to sell, import or manufacture vehicles inside the U.S. They have zero market share in the US. Allowing them to open a domestic facility would provide a foothold in the US market at the expense of manufacturers operating here.”
ExxonMobil and Chevron
Energy stocks like ExxonMobil and Chevron have done well this year, helped by the rising crude oil prices. Prices have soared because of the ongoing US-Iran war, which Trump started and has struggled to end.
Trump will likely push Xi to help him negotiate with Iran to end the war. China has had a long relationship with Iran, and, according to reports, has helped it with technology to target US targets in Iran.
Signs that China will take a more prominent role in ending the war would be bearish for energy stocks like Chevron and Exxon because it would lead to lower oil prices.
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