U.S. equities saw slight gains on Thursday, buoyed by cautious optimism following renewed dialogue between President Donald Trump and Chinese President Xi Jinping. Investors welcomed the news of ongoing trade talks between the two economic superpowers, despite a wave of underwhelming economic data that added tension ahead of Friday's critical jobs report. As Wall Street wavered, crude oil prices jumped, reflecting both geopolitical undercurrents and shifting economic expectations.

In early trading, the major U.S. indexes struggled to find consistent momentum, with the Dow, S&P 500, and Nasdaq all showing modest advances. Market sentiment was influenced by a phone conversation between Trump and Xi, in which both leaders agreed to continue discussions to resolve their long-standing trade disagreements. Though no breakthrough was achieved, the call helped stabilize investor nerves, providing some hope for progress.

Financial experts, like Matthew Keator of the Keator Group, emphasized the market’s sensitivity to these negotiations. He noted that the dialogue is a step in the right direction, but cautioned that such talks often face difficulties. As a result, investors should expect market fluctuations in the near term, especially as more clarity emerges around the outcome of the trade discussions.

Meanwhile, U.S. economic data showed troubling signs. Initial jobless claims reached their highest levels since October, while imports plunged by 16.3%—a direct effect of the administration’s volatile tariff strategies. Additional reports painted a gloomy labor picture, including a 47% annual rise in Challenger layoffs and a disappointing ADP payroll reading. These factors cast a shadow over the Labor Department’s monthly jobs report, set to release Friday.

However, softer economic data may give the Federal Reserve leeway to ease monetary policy further. Keator noted that benign inflation and rising jobless claims could support the case for not just one but potentially multiple interest rate cuts this year. Such action by the Fed might offer some relief to sectors feeling the brunt of economic uncertainty and could serve as a catalyst for modest recovery in sensitive industries.

Global market reactions were mixed. While the ECB cut rates by 25 basis points, as anticipated, President Christine Lagarde hinted at a potential summer pause in the easing cycle. European and emerging market indices posted modest gains. Meanwhile, the dollar softened in response to weak U.S. data, and Treasury yields fluctuated. Commodity prices moved accordingly, with crude oil rising over 1% and gold inching up slightly as investors turned to safer assets amid the uncertain landscape.